In Which Transaction Did the Donor/seller Not Recognize a Gain

question 34

Multiple Choice

In which transaction did the donor/seller not recognize a gain?

• A)A gave his car to his brother, who took over the 12 months of payments remaining due; the indebtedness represented by the remaining payments exceeded A's basis in the car at the time of the transfer.
• B)B sold a boat with a basis of $40,000 and fair market value of $60,000 to her nephew for $50,000.
• C)C sold a cabin with a basis of $45,000 and fair market value of $50,000 to his niece for $50,000.
• D)D gave her sister securities with a basis and fair market value of $25,000 in exchange for $10,000 in cash and a five-year, $15,000 note at 10 percent interest.

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Definitions:

Horny Beak

A hard, keratinous structure found in birds and certain reptiles, used for feeding, grooming, and other behaviors.

Respiratory Air Sacs

Membrane-enclosed spaces in birds that are part of the respiratory system, aiding in oxygen exchange and making flight more efficient.

Three-chambered Heart

A type of heart structure found in amphibians and some reptiles, consisting of two atria and one ventricle.

Amphibians

A class of cold-blooded vertebrates that includes frogs, toads, salamanders, and newts, which typically have a life cycle that includes both aquatic (larval) and terrestrial (adult) stages.