Question

In 2018, Joshua gave $6,900 worth of XYZ stock to his son. In 2019, the XYZ shares are worth $32,000.

If Joshua had not given his son the stock in 2018 and held onto it instead, how much more would his estate have been worth than if he had made the gift?

Answer 1

Considering the scenario,

In 2018, XYZ stock was worth $6,900. That means 1 stock of XYZ would fetch $6,900 if it is sold in the market.

In 2019, the worth of same XYZ stock is $32,000. That means 1 stock of XYZ would now fetch $32,000 if it is sold in the market.

Thus, the total worth of XYZ stock increased between 2018 and 2019 is $32000 - $6900 which is equal to $25,100.

Lets say Joshua's estate has only XYZ stock. So in 2018 he has $6,900. And if he had not gifted it to his son then in 2019 he would have had $32,000. The stock increase calculated above is $25,100.

So if Joshua had not given the stock to his son in 2018 his estate in 2019 would be worth $25,100 more than if he had made the gift.