Problem 13-58 (LO. 1, 2, 3, 9) Ira Cook is planning to make a charitable contribution to the Boy Scouts. He will contribute 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. limitations a. Complete the statements below regarding whether Ira should follow the friend's advice. You may ignore any consideration to charitable contributions.) Selling the stock would result in a recognized gain of 5,000. Contributing the stock to the Boy Scouts will result in a contribution valued at $ 15,000 if the holding period is long-term and if the holding period is short term. Therefore, Ira should not follow the friend's advice. b. Assume that the fair market value is only $13,000. Complete the statement below regarding the tax consequences to Ira of following the friend's advice If Ira follows the friend's advice, he will recognize a loss a of $ 7,000 In addition, his charitable contribution would be Therefore, Ira should not , follow the friend's advice. c Ira is considering giving the stock to his niece, Nancy, instead of the Boy Scouts. Complete the statements below regarding the possible tax consequences to tra If the stock has a fair market value of $20,000 and the adjusted basis of the stock is 515,000, Ira should give his niece If the fair market value of the stock is $13,000, Ira should give his niece , The critical variable is d. Complete the letter from Ira's accountant regarding whether he should sell the stock and contribute the cash or contribute the stock to the Boy Scouts, if the adjusted basis is $15,000. Ira told his accountant that he purchased the stock six years ago. Maloney, Young, Nellen, & Persellin, CPAS 5191 Natorp Boulevard Mason, OH 45040 December 3, 2020 , Mr. Ira Cook 500 Ireland Avenue DeKalb, IL 60115 Dear Mr. Cook: I am responding to your request concerning whether you should (1) contribute Crystal stock to the Boy Scouts or (2) sell the stock and contribute the cash instead. My conclusions are based on the information you provided during our telephone conversion. (a) The Crystal stock was purchased six years ago (b) The adjusted basis of the stock is $15,000. $. (c) The fair market value of the stock is $20,000. More beneficial tax consequences result if you Under this option, you will be entitled to a charitable contribution deduction of $ Under the second option, a charitable deduction of $ is available, given that cash is being contributed to the Boy Scouts. The sale of the stock would be a event that would result in a of . Should you need additional advice, please contact me. Therefore, I recommend that you I Sincerely, Bianca Campbell, CPA Tax Partner