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15 October, 08:30

Ralph gives his daughter, angela, stock (basis of $8,000; fair market value of $6,000). no gift tax results. if angela subsequently sells the stock for $10,000, what is her recognized gain or loss?

a. $10,000

b. $4,000

c. $0

d. $2,000

e. none of these choices are correct.

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Answers (2)
  1. 15 October, 08:51
    0
    D) $2,000

    Explanation:

    Angela's basis on the stocks will be the same as her father's. Since she sold the stocks, her basis will be $8,000, so her recognized gains will = selling price - basis = $10,000 - $8,000 = $2,000

    The IRS allows the donee (Angela) to use the doners (Ralph) basis when selling an asset received as a gift in order to determine the realized gain/loss.
  2. 15 October, 08:58
    0
    Answer: D. $2000

    Explanation:

    Profit (gain) = selling price - cost price

    Cost price = $8000

    Selling price = $10000

    Profit (gain) = $10000 - $8000

    = $2000
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Home » Business » Ralph gives his daughter, angela, stock (basis of $8,000; fair market value of $6,000). no gift tax results. if angela subsequently sells the stock for $10,000, what is her recognized gain or loss? a. $10,000 b. $4,000 c. $0 d. $2,000 e.
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