What are the tax consequences of all the transactions

Assignment Help Taxation

Reference no: EM133449148

Case Study: Inigo Montoya goes to work for Vizzini, Inc. and is granted stock options as part of his incentive package. The stock is traded on an established securities market. On January 1, 2020, Vizzini transfers to Inigo 30,000 shares of substantially non-vested stock in Vizzini. At the time of the transfer, the shares have an aggregate fair market value of $60,000. Inigo pays Vizzini $30,000 in exchange for the stock.

The stock agreement states that if Inigo stops working for Vizzini, Inc. as an employee prior to January 1, 2022, Inigo will forfeit the stock back to Vizzini who will reimburse him the amount he paid for the stock. So January 1, 2022 is the date the shares are fully vested and Inigo no longer faces forfeiture if he stops working for Vizzini. On the vesting date of Jan. 1, 2022, the stock has a fair market value of $90,000.

On August 14, 2022, Inigo sells the stock for $102,000.

Question #1 - What are the tax consequences of all the transactions if Inigo does not make a valid §83(b) election?

Question #2 - What are the tax consequences if Inigo does make a timely valid §83(b) election?

Reference no: EM133449148

Questions Cloud

What was your favorite tax topic and why : What was your favorite tax topic and why? Which topic was the most confusing? Which topic would you have liked to spend more time learning about?

What would be the amount of the losses that could be carried : If the shares of Lossco were purchased by an unrelated Canadian corporation, what would be the amount of the losses that could be carried forward in Lossco

How much she loves and cherishes : how much she loves and cherishes them and the time they have sharedWith every visit she gives them a small gift to remember her byJada is MOST

Discuss its development as an interaction of nature : discuss its development as an interaction of nature and nurture, and explain the significance of research on temperament for parents and caregivers

What are the tax consequences of all the transactions : What are the tax consequences of all the transactions if Inigo does not make a valid §83(b) election? What are the tax consequences if Inigo does make a timely

What are the two main factors that facilitate the movement : What are the two main factors that facilitate the movement of plasma from the glomerular capillaries into Bowman's capsule?

What are the major types of anemia : What are the 4 major types of anemia and What type of anemia that Harry suffering from, and how is it treated?

Provide experimental evidence for the ussing model : Provide experimental evidence for the Ussing model of transepithelial sodium transport across isolated frog skin. Ouabain, amiloride and barium were administere

Describe the different types of bankruptcy and the options : Describe the different types of bankruptcy and the options for the organization. The description should include information on. At a minimum

User Account

All Pages