Becky Bell Owned Common Stock in a Corporation That She

question 13

Multiple Choice

Becky Bell owned common stock in a corporation that she purchased two years ago for $25,000. On June 6, 2012, Becky sold the stock for its $11,000 fair market value to her son, Max Monroe. On December 19, 2012, Max sells the stock to an unrelated party for its $13,000 fair market value. How much gain or loss will Becky and Max recognize on their respective income tax returns for 2012?

• A) $0 and $0, respectively.
• B) ($14,000) and $0, respectively.
• C) ($14,000) and $2,000, respectively.
• D) $0 and $2,000, respectively.
• E) None of the above.

---

Definitions:

Tensing Muscles

The act of contracting one's muscles tightly, often used as a relaxation technique by progressively tensing and then relaxing different muscle groups.

Cerebellum

A brain structure that regulates movement and balance, is involved in remembering simple skills and acquired reflexes, and plays a role in cognitive and emotional learning.

Physiological Patterns

Regular and predictable behaviors or responses of the body's systems, often in relation to health and disease.

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in regulating heart rate, blood vessel and air passage diameters, and metabolic shifts; it plays a key role in the body's fight-or-flight response.