Tom recently received 2,000 shares of restricted stock from his employer, Independence Corporation, when the share price was $10 per share. Tom's restricted shares vested three years later when the market price was $14. Tom held the shares for a little more than a year and sold them when the market price was $20. What is the amount of Tom's income or loss on the vesting date?
A)$0
B)$10,000
C)$20,000
D)$28,000

Question

Quizplus · Accepted Answer

On the vesting date, the value of Tom's shares is calculated by multiplying the number of shares (2,000) by the market price at vesting ($14). This gives a total value of $28,000, which represents the income Tom would recognize at the time of vesting, as the shares are considered compensation for services rendered.

Tom Recently Received 2,000 Shares of Restricted Stock from His