Pony,Inc,Issues Restricted Stock to Employees in July 2012,with a Two-Year

Multiple Choice

Pony,Inc.,issues restricted stock to employees in July 2012,with a two-year vesting period and an SRF.An employee must remain a full-time employee of Pony for two years after the restricted stock is issued.The stock is trading at $10 per share when the stock is issued.An employee,Sam,decides to make the § 83(b) election with his 1,000 shares.At the end of 2012,the stock is trading at $13 per share.How much income,if any,must Sam recognize in 2012?

A) $0.
B) $10,000 capital gain.
C) $10,000 ordinary income.
D) $13,000 capital gain.
E) $13,000 ordinary income.