Paul sold TLC stock valued at $22,000 to his son, Sam, for $12,000. Paul’s basis in the stock is $17,000. Which of the following is correct? *
Paul reports a gift of $22,000 on Form 709 and a capital loss of $10,000 ($12,000 – $22,000) on Form 1040. Sam’s basis in the stock is $12,000.
No reporting is required because the transfer was between immediate family members.
Why is the election for s corporation status attractive?