William Choring owned shares of two publicly traded companies, as follows: William gifted the TriStar Limited shares to his wife on July 1, 2020. His wife kept the shares and received $138 of taxable dividends (grossed up amount)in September, 2020. William sold the Global Inc. shares on the open market. Assuming William earned no other income, did not elect out of ITA 73(1), and these are the only transactions that occurred in the year, which one of the following represents William's 2020 Net Income For Tax Purposes?

Question

William Choring owned shares of two publicly traded companies, as follows:  William gifted the TriStar Limited shares to his wife on July 1, 2020. His wife kept the shares and received $138 of taxable dividends (grossed up amount)in September, 2020. William sold the Global Inc. shares on the open market. Assuming William earned no other income, did not elect out of ITA 73(1), and these are the only transactions that occurred in the year, which one of the following represents William's 2020 Net Income For Tax Purposes?

Quizplus · Accepted Answer

- The TriStar Limited shares were gifted to William's wife, hence there is no tax implication for William.
- William sold the Global Inc. shares on the open market, which means he realized a capital gain or loss. However, the question does not provide any information about the cost or proceeds of the sale, so we cannot calculate the capital gain or loss at this time. We will need this information to calculate the net income for tax purposes.
- William's wife received $138 of taxable dividends (grossed up amount) from the TriStar Limited shares. Since the shares were gifted to his wife, she will be the one to report the dividend income on her own tax return. William is not subject to any tax on this income.
- Assuming William has no other income, his net income for tax purposes will be the net capital gain or loss from the sale of the Global Inc. shares. However, we cannot calculate this without more information.

Therefore, the only option that makes sense is D, as it provides a plausible net income for tax purposes without providing any information on the sale of the Global Inc. shares. However, we should note that this answer is still incomplete and cannot be confirmed without more information.

William Choring Owned Shares of Two Publicly Traded Companies, as Follows