9a. Emily recently retired from Fox, Inc., a national retail store. When Emily retired her...
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9a. Emily recently retired from Fox, Inc., a national retail store. When Emily retired her stock bonus plan had 5,000 shares of Fox, Inc. stock. Fox, Inc. took deductions equal to $10 per share for the contributions made on Emilys behalf throughout the course of her career. At retirement, Emily took a lump-sum distribution of the employer stock. The fair market value of the stock at distribution was $25 per share. Sixteen months after distribution, Emily sold the stock for $30 per share. What amount is considered to be ordinary income on Emilys tax return at the date the stock was distributed?
a) $0
b) $50,000
c) $75,000
d) $125,000
9b. Using the same information in #9a, what are Emilys income tax consequences upon sale sixteen months after distribution?
a. $0, should would not have an income tax consequence.
b. $150,000 long term capital gain.
c. $75,000 long term capital gain; $25,000 short term capital gain.
d. $100,000 long term capital gain.
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