Determining the dividends on the stock

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Reference no: EM13991477

During the current year, Alexis gives her daughter Tabatha stocks worth $80,000 on the condition that she pay her son Rory the first $7,000 in dividends on the stock each year. Discuss the taxability of this arrangement in each of the following cases:

a. The stocks pay total dividends of $8,000. Tabatha pays Rory $7,000 under the agreement.

b. The stocks pay total dividends of $5,500. Tabatha pays Rory $5,500 under the agreement.

Reference no: EM13991477

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