Donald Sells Stock with an Adjusted Basis of $38,000 to His

question 33

Multiple Choice

Donald sells stock with an adjusted basis of $38,000 to his son,Kiefer,for its fair market value of $30,000.Kiefer sells the stock three years later for $32,000.Kiefer will recognize a gain on the subsequent sale of

• A)$0.
• B)$2,000.
• C)($6,000).
• D)($8,000).

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Definitions:

Variable Resources

Inputs that change in quantity with levels of production, such as raw materials and labor.

Variable Cost

Costs that change in proportion to the level of goods or services that a business produces.

ATC

Average Total Cost, which is the sum of all production costs divided by the quantity of output produced.

MC

Marginal Cost, the change in total production cost that comes from making or producing one additional unit.