Kathleen Received Land as a Gift from Her Grandfather

question 80

Multiple Choice

Kathleen received land as a gift from her grandfather.At the time of the gift,the land had a FMV of $85,000 and an adjusted basis of $110,000 to Kathleen's grandfather.One year later,Kathleen sold the land for $80,000.What was her gain or (loss) on this transaction?

• A)no gain or loss
• B)($5,000)
• C)$5,000
• D)$30,000

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Definitions:

Resource

Assets, materials, or substances that provide economic value or benefit to individuals or businesses.

Extraction Cost

Refers to the expenses involved in removing natural resources from the earth, such as mining or drilling.

User Cost

The cost associated with using a durable asset over a period, including the depreciation of the asset and possibly other expenses like maintenance.

Transtheoretical Model

A theory of behavior change that outlines five stages individuals move through when modifying behavior, from precontemplation to maintenance.