Steve Gifted Shares in a Public Corporation to His Fifteen-Year-Old

question 6

Multiple Choice

Steve gifted shares in a public corporation to his fifteen-year-old son, Simon. The ACB of the shares was $10,000. During the year, Simon received $500 in dividends from the shares. Simon then sold the shares for $12,000. Which of the following is true for Steve and Simon?

• A) Simon will have to claim the dividends and capital gain on his tax return.
• B)Steve will have to claim the dividends on his tax return and Simon will have to recognize the capital gain on his tax return.
• C) Steve will have to claim the dividends and a capital gain on his tax return.
• D) Simon will have to claim the dividends on his tax return and Steve will have to recognize the capital gain on his tax return.

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Definitions:

Celler-Kefauver Act

A U.S. law enacted in 1950 to amend the Clayton Act, aiming to prevent anti-competitive mergers and acquisitions by prohibiting the acquisition of assets if the effect reduces competition.

Mergers

The combination of two or more companies into one entity, often to enhance market share and reduce competition.

Celler-Kefauver Act

A U.S. law enacted in 1950, aimed at preventing anti-competitive mergers and acquisitions that could create monopolies or reduce competition.

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at preventing anticompetitive practices, such as price discrimination and monopolies, not covered by the Sherman Act.