On September 3, 2018, Able, a single individual, purchased § 1244 stock in Red Corporation from his friend Al for $60,000. On De
cember 31, 2018, the stock was worth $85,000. On August 15, 2019, Able was notified that the stock was worthless. How should Able report this item on his 2019 tax return?
I believe the answer is: An Revocable Living Trust
Revocable living trust refers to a form of planning that help you determine the person who would obtain your properties when you die. A revocable living trust would cover three phases of the maker's life: his lifetime, possible incapacitation, and what happens after his death.
Explanation: In simple words, it refers to a tax structure in which the tax payer is charged as per his or her ability to pay. Under this system , a lower tax bracket is applied for low income levels and high for high income levels.
The basic assumption for applying such structure is that the high class have earned that money from the resources of the lower class thus they have to give a higher share from their income so that the lower class could be developed from that money.