Steve Gifted Shares in a Public Corporation Which Cost $10,000

question 2

Multiple Choice

Steve gifted shares in a public corporation which cost $10,000 to his fifteen year old son,Simon.During the year,Simon received $500 in dividends.Simon then sold the shares for $12,000.Which of the following tax situations 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:

Logistics Activities

Operations involved in the management of the flow of goods from the point of origin to the point of consumption, encompassing transportation, warehousing, and inventory management.

Manufacturing Companies

Businesses involved in the production of goods using labor, machinery, and raw materials.

Services Sector

A segment of the economy composed of businesses and individuals that provide intangible goods or services to consumers, such as healthcare, education, finance, and hospitality.

Enterprise Resource Planning (ERP)

An integrated management of main business processes, often in real time and mediated by software and technology, aimed at improving efficiency and data accuracy.