Steve Gave Stock with an Adjusted Basis of $7,000 and an FMV

question 41

Multiple Choice

Steve gave stock with an adjusted basis of $7,000 and an FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is

• A)$5,000.
• B)$2,000.
• C)$0.
• D)none of the above

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Definitions:

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments determined by private decision, and by prices, production, and the distribution of goods determined mainly by competition in a free market.

Economic Marginality

Refers to the condition of individuals or groups being on the edge of economic stability, often experiencing inadequate access to resources, employment, and income.

Richard Quinney

A prominent sociologist known for his contributions to the conflict theory of criminology, focusing on the social realities of crime and its societal implications.

Dominant Class

The dominant class refers to the group of people in a society who hold the most power, wealth, and prestige, often dictating the primary cultural, political, and economic directions.