The taxpayer owns stock with an adjusted basis of $15,000 and a fair market value of $8,000 . If the stock or cash is going to be given to her niece, it is preferable for the taxpayer to sell the stock and give the $8,000 of cash to her niece. The same preference would exist if the recipient were a qualified charitable organization
a. True
b. False
Indicate whether the statement is true or false
True
RATIONALE: The taxpayer can recognize the realized loss of $7,000 ($8,000 – $15,000) if she sells the stock. If the taxpayer gives the stock to her niece, the niece's adjusted basis for loss will be $8,000 and the $7,000 loss will benefit neither the taxpayer nor her niece. The same preference would exist if the recipient were a qualified charitable organization.
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