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:

Closed-System

A theoretical model where a system operates independently, without any interaction or exchange with its external environment.

Chain of Command

The formal line of authority within an organization, specifying who reports to whom.

Division of Labor

The assignment of different parts of a manufacturing process or task to different people in order to improve efficiency and productivity.

Span of Control

The number of subordinates that a manager or supervisor can effectively oversee, manage, and communicate with.