Margaret Died on September 16,2014,when She Owned Securities with a Basis

question 48

Multiple Choice

Margaret died on September 16,2014,when she owned securities with a basis of $50,000 and a FMV of $60,000.Caroline inherited the property and sold it on December 19,2014 for $67,000.What is Caroline's reported gain on this sale?

• A)$7,000 STCG
• B)$7,000 LTCG
• C)$17,000 STCG
• D)$17,000 LTCG

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Definitions:

Ordinary Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded, with all other factors being held constant.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting consumers' sensitivity to price changes.

Utility Function

A mathematical representation of a consumer's preference ranking over a set of goods and services.

Substitution Effect

Variations in consumer purchasing patterns as a result of shifting prices among products, which leads to the exchange of one good for another.