Cynthia and Norton Enright own all of the stock in Ibis Company, an S corporation. The Enrights are considering making gifts of some of the stock to their children (Addison, Tracy, Jordan, and Kirby) to shift income to them. Addison (age 20) is a high school graduate and does not intend to go to college. Tracy (age 21) is married and files a joint return with her husband. Jordan (age 23) and Kirby (age 24) are full-time college students. The Enrights request your advice on how to make these gifts effectively for tax purposes.

a. Write a letter to the Enrights on this matter. Their address is 1486 Garden Park, Elizabeth, NJ 07207.

b. Prepare a memo for your firm’s tax research files.