Under the Terms of Their Divorce Agreement Executed in August

question 121

Multiple Choice

Under the terms of their divorce agreement executed in August of this year,Clint transferred Beta,Inc.stock to his former wife,Rosa,as a property settlement.At the time of the transfer,the stock had a basis to Clint of $55,000 and a fair market value of $68,000.Rosa subsequently sold the stock for $75,000.What is the tax consequence of first the stock transfer and then the stock sale to Rosa?

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Definitions:

Consent

Voluntary agreement or permission given by a person with full understanding of the matters involved.

Tort Of Defamation

A legal wrong involving making false statements about someone that damage their reputation.

Tort Of Nuisance

A legal claim arising from an act that unlawfully interferes with the use and enjoyment of one's property.

Tort Of Battery

A legal term for the intentional and unlawful physical contact or harm to another person without their consent.