Ida Sells Some Stock to Mae for $20,000 at a Time

question 58

Essay

Ida sells some stock to Mae for $20,000 at a time when the stock is valued at $50,000. Later in the year, she gives Mae $16,000 in cash.
a)What is the amount of Ida's taxable gifts?
b)How would your answer to Part (a)change if Ida gave the cash to Jonathan instead of to Mae?

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Definitions:

Specialization

The process of focusing on and becoming expert in a particular subject or skill, often resulting in increased efficiency and productivity.

Nations

Large groups of people united by common descent, history, culture, or language, inhabiting a particular country or territory.

Domestic Price

The price of goods or services within a country's borders, as opposed to international or foreign prices.

World Price

The international market price of a good or service, determined by global supply and demand, that influences local market prices and trade policies.