Posted: March 3rd, 2014
Five years ago, Joe, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under § 1244, at a cost of $55,000.
Five years ago, Joe, a single taxpayer, acquired stock in a corporation that qualified as a small business corporation under § 1244, at a cost of $55,000. Joe wants to give his son, Jake, $15,000 to help finance Jake’s college education. The stock is currently worth $15,000. Joe is considering selling the stock in the current year for $15,000 and giving the cash to Jake. As an alternative, Joe could give the stock to Jake and let Jake sell it for $15,000. Which alternative should Joe choose and why?
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