Virginia Gave Stock with an Adjusted Basis of $8,000 and an FMV

question 45

Multiple Choice

Virginia gave stock with an adjusted basis of $8,000 and an FMV of $10,000 to Carmen. No gift tax was paid on the transfer. Carmen then sold the stock for $9,000. The gain or loss Carmen will recognize on the sale is

• A)$2,000 gain.
• B)$1,000 gain.
• C)$1,000 loss.
• D)none of the above

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Definitions:

Perfect Information

A theoretical condition in which all participants in a market have complete and accurate information about the products and prices.

Union Representation

The action or process of having a labor union act as an intermediary between employees and management to negotiate terms of employment, wages, and working conditions.

Global Scene

A phrase referring to the international landscape or context in which businesses and governments operate, including considerations of economic, cultural, and political factors.

Agriculture Sector

The part of the economy concerned with the production, processing, and distribution of food, fiber, and products from plants and animals.