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What family tax savings are achieved through the gift

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Reference no: EM132842420

Mac's 24-year-old daughter, Alana, is a full-time student. In 2018, Mac gives 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 32 and 12 percent marginal tax brackets for ordinary income and in the 15 and 0 percent tax brackets for dividend income, respectively.

Problem a. How much must Alana and Mac include in gross income in 2018?

Problem b. What family tax savings are achieved through this gift? (Round answer to 2 decimal places, e.g. 52.75.)

 

Reference no: EM132842420

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