Stevie recently received 1,080 shares of restricted stock from her employer, Nicks Corporation, when the share price was $9 per share. Stevie's restricted shares vested three years later when the market price was $12. Stevie held the shares for a little more than a year and sold them when the market price was $15. Assuming Stevie made a section 83(b)election, what is the amount of Stevie's ordinary income with respect to the restricted stock?
A)$0
B)$3,240
C)$9,720
D)$12,960

Question

Quizplus · Accepted Answer

The section 83(b) election allows Stevie to recognize income at the time of the stock grant rather than at vesting. The ordinary income is calculated based on the fair market value at the time of the grant: 1,080 shares * $9 = $9,720.

Stevie Recently Received 1,080 Shares of Restricted Stock from Her