LO.9 In December each year, Alice Young contributes 10% of her gross income to the United Way (a 50% organization). Alice, who is in the 35% marginal tax bracket, is considering the following alternatives for satisfying the contribution.

Fair Market Value

(1) Cash donation $21,000

(2) Unimproved land held for six years ($3,000 basis) 21,000

(3) Blue Corporation stock held for eight months ($3,000 basis) 21,000

(4) Gold Corporation stock held for two years ($26,000 basis) 21,000 Alice has asked you to help her decide which of the potential contributions listed above will be most advantageous taxwise. Evaluate the four alternatives, and write a letter to Alice to communicate your advice to her. Her address is 2622 Bayshore Drive, Berkeley, CA 94709.