Brittany Callihan sold stock (basis of $184,000 ) to her son, Ridge, for $160,000, the fair market value. a. What are the tax consequences to Brittany? Brittany will have a $ that is b. What are the tax consequences to Ridge if he later sells the stock for $190,000 ? What are the tax consequences to Ridge if he later selis the stock for $152,000 ? What are the tax consequences to Ridge if he later sells the stock for $174,000? c. Complete the letter to Brittany in which you inform her of the tax consequences if she sells the stock to Ridge for $160,000. Explain how a sales transaction could be structured that would produce better tax consequences for her. SWFT, LLP 5191 Natorp Boulevard Mason, OH45040 June 21, 2022 Ms. Brittany Callihan 32 Country Lane Lawrence, KS 66045 Dear Ms. Callihan: As you requested in your note, 1 am providing you with the tax consequences of the proposed sale of stock to your son Ridge. Although you would have a potential of $ you be able to recognize this on your tax return. The tax law disallows the recognition of between certain related parties. If you do sell the stock to Ridge, his tax basis for calculating gain or loss on a subsequent sale by him would be . However, if he should sell it at a gain, he could use your to his gain. Therefore, from a planning perspective, you should sell the stock to Brittany Callihan sold stock (basis of $184,000 ) to her son, Ridge, for $160,000, the fair market value. a. What are the tax consequences to Brittany? Brittany will have a $ that is b. What are the tax consequences to Ridge if he later sells the stock for $190,000 ? What are the tax consequences to Ridge if he later selis the stock for $152,000 ? What are the tax consequences to Ridge if he later sells the stock for $174,000? c. Complete the letter to Brittany in which you inform her of the tax consequences if she sells the stock to Ridge for $160,000. Explain how a sales transaction could be structured that would produce better tax consequences for her. SWFT, LLP 5191 Natorp Boulevard Mason, OH45040 June 21, 2022 Ms. Brittany Callihan 32 Country Lane Lawrence, KS 66045 Dear Ms. Callihan: As you requested in your note, 1 am providing you with the tax consequences of the proposed sale of stock to your son Ridge. Although you would have a potential of $ you be able to recognize this on your tax return. The tax law disallows the recognition of between certain related parties. If you do sell the stock to Ridge, his tax basis for calculating gain or loss on a subsequent sale by him would be . However, if he should sell it at a gain, he could use your to his gain. Therefore, from a planning perspective, you should sell the stock to
