Restricted stock (not to be confused with a restricted stock unit, or RSU) is typically awarded to company directors and executives who then own the stock at the end of the vesting period. Also called letter stock or Section 1244 stock, a restricted stock award comes with strings attached. For example, it cannot be transferred and it may be forfeited if the recipient fails to meet expectations. The tax rules for restricted stock are fairly straightforward. The major tax planning consideration is deciding whether or not to make the Section 83(b) election. The $36,000 is the appreciation of the stock price from the grant date to the vest date. You can also receive dividends with restricted stock. Dividends are taxable (the tax treatment is discussed in another FAQ).