2. Mike, age 60, is a participant in the stock bonus plan of Tantalus, Inc.,...
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2. Mike, age 60, is a participant in the stock bonus plan of Tantalus, Inc., a closely held corporation. Mike received contributions in shares to the stock bonus plan and Tantalus, Inc. took income tax deductions as follows: Value per Share Year # of Shares (At Time of Contribution) Year 1 100 $10 Year 2 125 $12 Year 3 150 $13 Year 4 200 $15 Year 5 400 $18 Mike terminates employment and takes a distribution from the plan of 975 shares of Tantalus, Inc. having a fair value of $19,500. What are Mike's tax consequences? a. There are no immediate tax consequences because he has not sold the stock. b. Mike has ordinary income of $14,650 at distribution. c. Mike has net unrealized appreciation of $19,500 at distribution. d. Mike has ordinary income of $19,500 at distribution
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