Terry Owns Lakeside, Inc

question 32

Multiple Choice

Terry owns Lakeside, Inc. stock adjusted basis of $80,000) , which she sells to her brother, Jake, for $64,000 its fair market value) . Eighteen months later, Jake sells the stock to Pamela, a friend, for $78,000 its fair market value) . What is Terry's recognized loss, Jake's recognized gain or loss, and Pamela's adjusted basis for the stock? Terry's Recognized Loss Jake's Recognized GainLoss) Pamela's Basis

• A) $ -0- $ -0-
• $78,000
• B) $ -0- $14,000
• $64,000
• C) $ -0- $14,000
• $78,000
• D) $16,000 $14,000
• $78,000
• E) None of the above.

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Definitions:

Diminishing

The process of lessening or decreasing in size, importance, or intensity.

Output

The quantity of goods or services produced by a business, individual, machine, or industry over a specified period.

Marginal Costs

Marginal costs refer to the increase or decrease in the total cost of producing one more unit of a good or service.

Marginal Productivity

The additional output that results from employing one more unit of input, such as labor or capital, while keeping other inputs constant.