Rita, who has a marginal tax rate of 37%, is planning to make a gift to her grandson who is in the lowest tax bracket. Which of the following holdings of stock would be the most tax advantageous gift from Rita's perspective?
A.
| Stock | FMV | Adjusted Basis |
| A | $25,000 | $12,000 |
B.
| Stock | FMV | Adjusted Basis |
| A | $25,000 | $32,000 |
C.
| Stock | FMV | Adjusted Basis |
| B | $25,000 | $25,000 |
D. For income tax purposes, Rita will be indifferent as to choice of stock to gift.
Answer: A
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