Rita, who has marginal tax rate of 39.6%, is planning to make a gift to her grandson who is in the lowest tax bracket. Which of the following holdings of stock would be the most tax advantageous gift from Rita's perspective?
D) For income tax purposes, Rita will be indifferent as to choice of stock to gift.

Question

Quizplus · Accepted Answer

Gifts of appreciated property are generally advantageous because the gain recognition will be shifted to the donee who pay tax at a lower rate (or at 0%).

Rita, Who Has Marginal Tax Rate of 39