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<< Is there any situation where it is advisable to gift stock with a FMV less than the donor's basis? It seems that it erases the possibility for the donor and the recipient to get the tax advantage of a loss. >>

Well, let's say for argument's sake that the donor thinks it's a dog, but the recipient thinks it's the next [insert your favorite overblown tech wonderstock here]. The donor wants to get rid of it, doesn't really need the loss because he's got enough capital loss carryover to take him past death, and likes the recipient, who doesn't plan on having a loss, but a sizeable gain someday.

<< Shouldn't either the donor or the recipient be allowed to take a loss? >>

Perhaps, but that's not what the law says. Complaints about the law should be taken to your members of Congress, who LOVE hearing from their constiuents.

Phil Marti
Tax Preparer
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