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

---

Definitions:

Channel Conflict

A situation where channels in a distribution chain are in competition with each other or interfere, leading to reduced efficiency or sales.

Vertical

An industry or market in which businesses provide products or services specific to a particular niche, focusing on a tightly defined area of operation.

Conventional

Adhering to established practices or methods; traditional.

Croissants

A buttery, flaky pastry of Austrian origin that is crescent-shaped and commonly associated with French cuisine.