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.

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Definitions:

New Deal

A series of programs, public work projects, financial reforms, and regulations enacted by President Franklin D. Roosevelt in the United States during the Great Depression.

Predecessor

An individual or entity that held a position or office before the current holder.

Election

A formal group decision-making process by which a population chooses an individual or multiple individuals to hold public office.

Critics

Individuals who evaluate or analyze the merits and faults of artistic, literary, or political works.