Mr and Mrs

question 73

Multiple Choice

Mr. and Mrs. Trent divorced last year. Pursuant to the divorce, Mr. Trent transferred marketable securities (FMV $100,000; basis $67,000) to Mrs. Trent. This year, Mrs. Trent sold the securities for $112,000. Which of the following statements is true?

• A) Mrs. Trent recognized a $45,000 gain on sale this year.
• B) Mrs. Trent recognized $100,000 income last year.
• C) Mrs. Trent recognized a $12,000 gain on sale this year.
• D) Mrs. Trent recognized no income last year and no gain on sale this year.

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Definitions:

Equal Distribution

The concept of distributing resources or income in a way that every member of a society gets an equal share.

Marginal Cost

The expense incurred from the manufacture of an extra single unit of a product or service.

Opportunity Cost

The expense incurred from not choosing the second-best option available during decision-making.

Marginal Cost

The swell in aggregate expenditure due to the production of an additional unit of a product or service.