Steve Gave Stock with an Adjusted Basis of $7,000 and an FMV

question 41

Multiple Choice

Steve gave stock with an adjusted basis of $7,000 and an FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is

• A)$5,000.
• B)$2,000.
• C)$0.
• D)none of the above

---

Definitions:

C-H Bonds

Chemical bonds between carbon (C) and hydrogen (H) atoms, forming the backbone structure of organic molecules.

Electronegativity Difference

The difference in electronegativity values between two atoms, determining the polarity of the bond they form.

H-Se Bonds

Refers to the chemical bonds between hydrogen and selenium atoms, commonly found in hydrogen selenide.

Molecular Polarity

A measure of how evenly electric charges are distributed in a molecule, affecting its interactions with other molecules.