Tracy Gave Stock with an Adjusted Basis of $18,000 and an FMV

question 98

Multiple Choice

Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is

• A) $0.
• B) $1,000 gain.
• C) $1,500 loss.
• D) none of the above

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Definitions:

Stand-alone Risk

The risk associated with a single asset or investment, without considering the asset's interaction or diversification effects within a portfolio.

Coefficient of Variation

A statistical measure of the dispersion of data points in a data series around the mean, used to assess the level of volatility relative to the mean.

Countercyclical

Describes economic policies or activities that move in opposition to the business cycle, aiming to stabilize the economy by reducing fluctuations.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values around the mean.