On January 1, 2020, Adam gave Lou, her son, a 36-month certificate of deposit she had purchased on December 31, 2018, for $8,638. The certificate had a maturity value of $10,000 and the yield to maturity was 5% with interest compounded annually. On December 2, 2020, Adam also gave 500 shares of stock in Disney to Lou. On November 30, 2020, Disney had declared a dividend of $1.00 per share payable to stockholders of record on December 5th. Required: Determine the amount of interest and dividends (if any) that lou must include in his gross income for 2020? Show computations to support your answer.
On January 1, 2020, Adam gave Lou, her son, a 36-month certificate of deposit she had purchased on December 31, 2018, for $8,638. The certificate had a maturity value of $10,000 and the yield to maturity was 5% with interest compounded annually. On December 2, 2020, Adam also gave 500 shares of stock in Disney to Lou. On November 30, 2020, Disney had declared a dividend of $1.00 per share payable to stockholders of record on December 5th. Required: Determine the amount of interest and dividends (if any) that lou must include in his gross income for 2020? Show computations to support your answer.
Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges
Section: Chapter Questions
Problem 48P
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On January 1, 2020, Adam gave Lou, her son, a 36-month certificate of deposit she had purchased on December 31, 2018, for $8,638. The certificate had a maturity value of $10,000 and the yield to maturity was 5% with interest compounded annually. On December 2, 2020, Adam also gave 500 shares of stock in Disney to Lou. On November 30, 2020, Disney had declared a dividend of $1.00 per share payable to stockholders of record on December 5th.
Required: Determine the amount of interest and dividends (if any) that lou must include in his gross income for 2020?
Show computations to support your answer.
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