In the Current Taxable Year, Married Couple H and W

question 4

True/False

In the current taxable year, married couple H and W give a completed gift of a $20,000 certificate-of-deposit bearing simple interest to their 15-year-old child, C.The interest on the certificate paid to C during the current year totals $1,600.Under the assignment-of-income doctrine, the $1,600 must be included in the gross income of H and W.

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Definitions:

Conversion Value

The worth of a convertible security if it is converted into a different asset, usually common stock, at the current market price.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuing company's equity at certain times during the bond's life, usually at the discretion of the bondholder.

Common Stock

Equity ownership in a corporation, with voting rights and potential for dividends, representing a claim on part of the company’s earnings and assets.

Conversion Ratio

The specified number of shares that can be exchanged for one unit of the convertible security.