Virginia Gave Stock with an Adjusted Basis of $8,000 and an FMV

question 45

Multiple Choice

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

• A)$2,000 gain.
• B)$1,000 gain.
• C)$1,000 loss.
• D)none of the above

---

Definitions:

Annuity

An annuity is a financial product that pays out a fixed stream of payments to an individual, primarily used as an income stream for retirees.

Income

Money received, especially on a regular basis, for work or through investments.

Going Rate

Refers to the current average cost or pricing point for goods, services, or wages in a particular market or industry.

Oil Well

A drilled site where petroleum and natural gas are extracted from beneath the earth's surface.