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Five years ago, Jamal purchased 1 0 , 0 0 0 shares of stock at $ 1 0 per share in a pharmaceutical company. Today,
Five years ago, Jamal purchased shares of stock at $ per share in a
pharmaceutical company. Today, the stock is worth $ and is paying a
dividend of $ per year. Jamal expects that the stock will continue to appreciate
at a rate of per year, including the dividend. He wants to establish a college
education fund for his two daughters, ages and Which of the following
statements isare true?
If Jamal gives shares of stock to his yearold daughter, all dividends
from the shares in excess of her standard deduction will be taxed in her
income tax bracket.
If Jamal gives shares of stock to his yearold daughter and she sells
it for a $ gain, she will pay no tax at her marginal rate.
Two years from now, if Jamal's older daughter sells her shares of stock
at a gain of $; she will have only $ of income taxed at her rate.
All dividend income earned by his yearold daughter in excess of $
will be taxed at Jamal's income tax rate.
only.
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and
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