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22 November, 16:31

Simmons gives her child a gift of publicly-traded stock with a basis of $40,000 and a fair market value of $30,000. No gift tax is paid. The child subsequently sells the stock for $36,000.

What is the child's recognized gain or loss, if any?

a. $4,000 loss.

b. No gain or loss.

c. $6,000 gain.

d. $36,000 gain.

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  1. 22 November, 16:35
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    Basis in the stock = Carryover basis = $40,000

    Recognized loss = $40,000 - $36,000

    = $4,000
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