Question: Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis

Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira sell the stock and contribute the $20,000 in proceeds rather than contribute the stock.
a. Should Ira follow the friend's advice? Why or why not?
b. Assume that the fair market value is only $13,000. In this case, should Ira follow the friend's advice? Why or why not?
c. Rather than make a charitable contribution to the Boy Scouts, Ira is going to make a gift to Nancy, his niece. Advise Ira regarding (a) and (b).
d. Write a letter to Ira regarding whether in (a) he should sell the stock and contribute the cash or contribute the stock. He has informed you that he purchased the stock six years ago. Ira's address is 500 Ireland Avenue, DeKalb, IL 60115.

Step by Step Solution

★★★★★

3.48 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Ira should not follow the friends advice The sale of the stock by Ira would produce a realized and recognized gain of 5000 If the stock is contribut... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1152-L-B-L-T-L(5817).docx

120 KBs Word File

Students Have Also Explored These Related Business Law Questions!

Dan Simms is the president and sole shareholder of Simms Corporation (a calendar year C corporation), 1121 Madison Street, Seattie, WA 98121. Dan plans for die corporation to make a charitable...

Dan Simms is the president and sole shareholder of Simms Corporation, 1121 Madison Street, Seattle, WA 98121. Dan plans for the corporation to make a charitable contribution to the University of...

Julieta Simms is the president and sole shareholder of Simms Corporation (a cash method, calendar year C corporation), 1121 Madison Street, Seattle, WA 98121. Julieta plans for the corporation to...

1, 2, 3, 5 Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira...

Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira sell the...

61. LO.1, 2, 4, 11 Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested...

3. If a tax payer sells property for cash, the amount realized consists of the net proceeds from the sale. For each of the following, indicate the effect on the amount realized. A. the property sold...

Ira cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira sell the...

Ira Cook is planning to make a charitable contribution to the Boy Scouts of Crystal, Inc. stock worth $20,000. The stock has an adjusted basis of $15,000. A friend has suggested that Ira sell the...

Petroleum as a Microbial Food Source Some microorganisms of the genera Nocardia and Pseudomonas can grow in an environment where hydrocarbons are the only food source. These bacteria oxidize...

Repeat the analysis for Exercise 15 above, but this time assume the differences are not normally distributed. In exercise Staff Member Shirley Tom Janice Brian Ed Kim Monthly New Business Before...

If the price per share of a company is US $ 3 0 and the earnings per share are US $ 3 . 5 0 then the price - to - earnings ratig is A 8 . 5 7 times B 8 5 7 % C 0 . 1 1 times D 1 1 . 0 0 %

Describe ethical relativism and at least three philosophical challenges to this position.

A taxpayer, age 64, purchases an annuity from an insurance company for $50,000. She is to receive $300 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming...

The Harding Company manufactures skates. The companys income statement for 2013 is as follows: HARDING COMPANY Income Statement For the Year Ended December 31, 2013 Sales (11,100 skates @ $72 each) $...

Need both AW's and which is recommended!!! A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 39%, and MACRS depreciation is used. If the desired...

Anderson Company's last dividend was $2. The dividend growth rate is expected to be 10% for the next two years (Year 1 to Year 2), after which dividends are expected to grow at a constant rate of 5%...