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

question 20

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

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