Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Randy, age 63, is a participant in the stock bonus plan of XYZ, Inc., a closely held corporation. Randy received contributions in shares of XYZ stock to the stock bonus plan and XYZ, Inc. had the following income tax deductions:

Year 1: 100 shares with $12 value at time of contribution
Year 2: 125 shares with $15 value at time of contribution
Year 3: 150 shares with $8 value at time of contribution
Year 4: 200 shares with $18 value at time of contribution
Year 5: 400 shares with $20 value at time of contribution

Total: 975 shares with $14.75 simple average price

Randy terminates employment in year 6 and takes a distribution from the plan of 975 shares of XYZ, Inc., having a fair market value of $24,000. Which of the following correctly describes Randy's tax consequences in year 6 from this distribution if Randy does not sell the XYZ stock until year 8?

A. Randy has ordinary income of $15,875 and long-term capital gain of $8,125 in year 6.
B. Randy has long-term capital gain of $24,000 in year 6.
C. Randy has ordinary income of $15,875 in year 6.
D. Randy has a long-term capital gain of $8,125 in year 6.

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M924466
  • Price:- $12

Guranteed 24 Hours Delivery, In Price:- $12

Have any Question? 


Related Questions in Basic Finance

What is storage why is it risky what role does it play in

What is storage? Why is it risky? What role does it play in the economy? Why is delivery important if so few futures contracts end in delivery? What are the major functions of derivative markets in an economy? Why is spe ...

When the adjustable mirror on the michelson interferometer

When the adjustable mirror on the Michelson Interferometer is moved 20 wavelengths, how many fringe pattern shifts would be counted?

Company z just paid an annual dividend of 122 a share the

Company Z just paid an annual dividend of $1.22 a share. The stock has a market value of $34.60 and a dividend growth rate of 3.1 percent. What is the rate of return on this stock?

1 what are the four important issues influencing the

1. What are the four important issues influencing the response process that are listed in this chapter? Describe each. 2. What was the goal of the International Decade for Natural Disaster Reduction? 3. How does the Unit ...

Vbn is a microcap stock included in the wilshire 5000 index

VBN is a microcap stock included in the Wilshire 5000 index. The following lists the actual returns on VBN and the Wilshire 5000 index for 6 recent years. Year  VBN  Wilshire 20X1  -18.0% 13.0%  20X2 -10.0% -8.0% 20X3   ...

1 what makes managing employee health and safety programs

1. What makes managing employee health and safety programs around the world so difficult? 2. Why have family-friendly and work-life balance programs become so important? 3. Describe the kinds of health, safety, and secur ...

Explain why examining the earnings quality is important in

Explain why examining the earnings quality is important in valuation even though one uses cash flows for valuing projects and firms.

According to an article in the new york times it was the

According to an article in the New York Times, "It was the near universal agreement that potential conflicts were embedded in the [bond] ratings model." What is the bond ratings model? What potential conflicts are embedd ...

Read and study the following experimental designsfor eacha

Read and study the following experimental designs. For each: a. Identify the number of factors and the number of levels within each of the factors. Identify whether each of the factors is between participants or repeated ...

Gate gourmet case study success means getting to the plane

Gate Gourmet Case Study: Success Means Getting to the Plane on Time· Provide a comprehensive overview including background and analysis (two pages) of the case study. Then answer the following questions. The case study q ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro