A corporation that transfers restricted stock to an employee as compensation may deduct the stock's fair market value in the year of transfer even if the employee doesn't recognize the value as gross income in the year of transfer. T/F also explain the reason, thanks.

A corporation that transfers restricted stock to an employee as compensation may deduct the stock's fair market value in the year of transfer even if the employee doesn't recognize the value as gross income in the year of transfer. T/F also explain the reason, thanks.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 3RP

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Question

A corporation that transfers restricted stock to an employee as compensation may deduct
the stock's fair market value in the year of transfer even if the employee doesn't recognize
the value as gross income in the year of transfer. T/F also explain the reason, thanks.

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Step 1: Introduction to Restricted Stock and Tax Implications

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Step 2: Examination of Tax Deduction Timing for Corporations

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Step 3: Evaluation of Employee's Recognition of Income

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