Rob Sells Stock with a Cost of $3,000 to His

question 10

Multiple Choice

Rob sells stock with a cost of $3,000 to his daughter for $2,200, which is its fair market value. Later the daughter sells the stock for $3,200 to an unrelated party. Which of the following describes the tax treatment to Rob and Daughter?

• A) \[\begin{array} { | l | l | }
• \hline \text { Rob } & \text { Daughter } \\
• \hline \text { Recognizes no loss } & \text { Recognizes gain of } \$ 1,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | }
• \hline \text { Rob } & \text { Daughter } \\
• \hline \text { Recognizes no loss } & \text { Recognizes gain of } \$ 200 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | }
• \hline \text { Rob } & \text { Daughter } \\
• \hline \text { Recognizes } \$ 800 \text { loss } & \text { Recognizes gain of } \$ 1,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | }
• \hline \text { Rob } & \text { Daughter } \\
• \hline \text { Recognizes } \$ 800 \text { loss } & \text { Recognizes gain of } \$ 200 \\
• \hline
• \end{array}\]