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Business, 31.07.2021 01:20 victoriay3

Simon owns stock that has declined in value since acquired. He will either give the stock to his nephew, Fred, or sell it and give Fred the proceeds. If Fred receives the stock, he then would sell it to obtain the proceeds. Simon is in the 12% Federal income tax bracket, and Fred's bracket is 22%. In either case, the holding period for the stock will be short term. Classify the following items as "Yes, relevant tax issue" or as "Not a tax issue" in deciding whether to gift the stock or give the sale proceeds to Fred. • If Simon sells the stock, can he recognize the loss? • What is Fred's basis for the stock? • Will Simon recognize a gain or loss on the gift transfer?

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