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How much must alana and mac include in gross income

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Mac gives his daughter, Alana, 600 shares of Highgrowth stock. Mac purchased the stock 10 months ago at $20 per share. On the gift date, the stock is worth $35 per share. After the gift, Highgrowth declares and pays a $170 dividend to Alana. The next month, Alana sells her 600 shares for $38 per share. Mac and Alana are in the 35 and 15 percent marginal tax brackets, respectively.

a. How much must Alana and Mac include in gross income?

b. How much family tax savings is achieved through this gift?

Reference no: EM13314655

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