Elaine, a cash basis taxpayer, gave 1,000 shares of Vandlelay Company common stock to her daughter on
Question:
Elaine, a cash basis taxpayer, gave 1,000 shares of Vandlelay Company common stock to her daughter on September 29, 2021. Vandlelay Company is a publicly held company that has declared a $1.00 dividend on September 30th every year for the last 20 years. Just as Elaine had expected, the Company declared a $1.00 per share dividend on September 30th, payable on October 15th, to stockholders of record as of October 10th. The daughter received the $1,000 dividend on October 18, 2021.
atch.com is in the watch and timepiece business. Due to record setting profits Watch.com gives all employees a gold watch with a retail sales price of $2,000 for the holidays. The cost of the watch to the company is $1,200. How much must each employee include in their gross income:
$1,200 | ||
$800 | ||
$2,000 | ||
May be excluded as a de minimis fringe benefit. |
The daughter must recognize the income $1,000 because she constructively received the $1,000. | ||||||||||||||
The daughter must recognize $1,000 dividend income because she owned the stock when the dividend was declared and she received the $1,000. | ||||||||||||||
Elaine recognizes $750 and her daughter recognizes $250 in dividend income. | ||||||||||||||
Elaine must recognize the $1,000 dividend in her income because she knew the dividend would be paid. Laura, age 12, is claimed as a dependent on her parents’ tax return. During 2021, she had dividend income of $2000 from a stock investment and $800 wages from a part-time job. Laura’s standard deduction is:
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South Western Federal Taxation 2016 Comprehensive
ISBN: 9781305395114
39th edition
Authors: James H. Boyd, William H. Jr. Hoffman, David M. Maloney, William A. Raabe, James C. Young