Your client, Casey Farber, is the CEO of a publicly traded corporation. This year, her compensation consisted of $600,000 in cash and $600,000 of stock. The stock received was part of a restricted stock grant. Casey was granted the restricted stock in 2013, when the stock’s fair market value was $300,000. Casey did not make a Section 83(b) election. The restrictions on the stock lifted in the current year. The $600,000 was the stock’s fair market value on the date the restrictions lifted, and Casey still owns the stock.
With respect to the compensation received by Casey this year, what will be the corporation’s compensation expense deduction?
Partial list of research aids:
Regulation § 1.162–27.
Rev.Rul. 2012–19, 2012–28 I.R.B. 16.
Research Problem 2.