Virginia Gave Stock with an Adjusted Basis of $8,000 and an FMV

question 4

Multiple Choice

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

• A) $1,000 loss.
• B) $1,000 gain.
• C) $2,000 gain.
• D) none of the above

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Definitions:

Objective Measure

An assessment tool that is based on observable and measurable facts, minimizing personal biases and interpretations.

Festinger

Leon Festinger was a psychologist known for his theory of cognitive dissonance, which describes the discomfort experienced when holding conflicting thoughts.

Self-perception Theory

A theory suggesting individuals infer their own attitudes and emotions by observing their own behavior and the context in which it occurs.

Locus Of Control

A psychological concept that refers to how strongly individuals believe they have control over the situations and experiences that affect their lives.