A corporation that transfers restricted stock to an employee as compensation may deduct the stock's fair market value in the year of transfer even if the employee doesn't recognize the value as gross income in the year of transfer.

Question

Quizplus · Accepted Answer

A corporation can only deduct the fair market value of the restricted stock as compensation when the employee recognizes it as income, which typically occurs when the stock vests.

A Corporation That Transfers Restricted Stock to an Employee as Compensation