Phil's Father Died on January 10, 2017

question 41

Essay

Phil's father died on January 10, 2017. The father had owned stock for 20 years with a basis of $45,000 that was transferred to Phil as a gift on August 10, 2016, when the stock was worth $430,000. His father paid no gift taxes. This stock was worth $566,000 at the date of the father's death. Phil sold the stock for $545,000 net of commissions on February 23, 2017. What is the amount and nature of Phil's gain or loss from disposition of this property?

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Definitions:

Interest Rate

The cost of borrowing money, often expressed as a percentage of the borrowed amount.

Options

Financial instruments that give the holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a set time period.

Interest

The charge for borrowing money, typically expressed as an annual percentage of the loan amount, or the income earned from lending money.

Account

A record or statement that tracks financial transactions and the financial position of an individual, company, or other entity.