Mark and His Brother, Rick, Each Own Farms

question 1277

Multiple Choice

Mark and his brother, Rick, each own farms. Rick is experiencing severe financial difficulties and cannot afford to buy feed for his cattle. Mark purchases $2,000 of feed and gives Rick one- half of the feed. Mark tells Rick that there is no need to repay him and to consider the feed a gift. Which of the following statements is true?

• A) Mark can deduct $2,000 for the feed.
• B) Rick must report $1,000 as income.
• C) Mark can deduct $1,000 for the feed.
• D) None of the above is true.

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