Your uncle is ready to retire and head for the hills, so he says to you: “Look, I own 500 shares of stock in Startup, Inc. I’m ready to cash out, so I’ll sell it to you for the very same $25,000 I paid for it back in 2012. And, by the way, it’s qualified small business stock, so you’re completely protected on the downside – even if the company went under, you would get 100% tax cushion for the loss! What do you say…???” On its face, what’s wrong with this offer?

Your uncle is ready to retire and head for the hills, so he says to you: “Look, I own 500 shares of stock in Startup, Inc. I’m ready to cash out, so I’ll sell it to you for the very same $25,000 I paid for it back in 2012. And, by the way, it’s qualified small business stock, so you’re completely protected on the downside – even if the company went under, you would get 100% tax cushion for the loss! What do you say…???” On its face, what’s wrong with this offer?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 52P

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Similar questions

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