Four Years Ago, Don, a Single Taxpayer, Acquired Stock in a Corporation

question 86

Essay

Four years ago, Don, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under § 1244, at a cost of $60,000. Don wants to give his son, Ron, $20,000 to help finance Ron's college education. The stock is currently worth $20,000. Don is considering selling the stock in the current year for $20,000 and giving the cash to Ron. As an alternative, Don could give the stock to Ron and let Ron sell it for $20,000. Which alternative should Don choose?

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Definitions:

Person's Perception

The subjective process through which individuals interpret sensory stimuli to form their own understanding of the world.

Drive Theory

A psychological theory suggesting that motivation is a result of biological drives that require satisfaction.

Pull Theories

Theories that propose mechanisms or reasons why people are "pulled" towards certain behaviors or actions, often used in migration studies or motivational psychology.

Expectancy-value Theory

A theory which states that the motivation to engage in a behavior is determined by the expected outcomes and the value of those outcomes to the individual.