In 2010,Arlene Makes a Gift of Stock (Basis of $813,000;fair

question 90

Multiple Choice

In 2010,Arlene makes a gift of stock (basis of $813,000;fair market value of $413,000) to her mother,Elizabeth.As a result of the transfer,Arlene paid a gift tax of $60,000.Elizabeth's income tax basis in the stock is:

• A)$413,000 basis for gain and loss.
• B)$443,000 basis for gain and loss.
• C)$813,000 basis for gain and loss.
• D)$813,000 basis for gain and $413,000 basis for loss.
• E)None of the above.

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Definitions:

Activity Level

A measure of the volume of production or operations, often influencing costs and revenues in a business.

Fixed Cost Per Unit

The total fixed costs divided by the number of units produced, indicating how much each unit needs to contribute to fixed costs.

Level of Activity

A measure of the volume of production, operation, or work undertaken by a business or facility within a particular time period.

Unit Variable Cost

A cost that varies directly with the production volume, including materials and labor directly involved in production.