Frasier Sells Some Stock He Purchased Several Years Ago for $10,000

question 88

Multiple Choice

Frasier sells some stock he purchased several years ago for $10,000 to his brother, Niles, for $6,000.
I.If this is Frasier's only stock transaction, he can deduct only $3,000 of the loss.
II.If Niles sells the stock for $10,000, his taxable gain is $4,000.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Defense

The evidence and arguments presented in support of the defendant's case in a criminal action or lawsuit.

Contributory Negligence

A theory in tort law under which a complaining party’s own negligence contributed to his or her injuries. Contributory negligence is an absolute bar to recovery in some jurisdictions.

Proximate Cause

Legal cause; exists when the connection between an act and an injury is strong enough to justify imposing liability.

Assault

An intentional act by one person that creates an apprehension in another of an imminent harmful or offensive contact.