In Addition to Other Gifts, Megan Made a Gift of Stock

question 83

Multiple Choice

In addition to other gifts, Megan made a gift of stock to Jeri in 1975.Megan had purchased the stock in 1973 for $7,500.At the time of the gift, the stock was worth $20,000.If Megan paid $850 of gift tax on the transaction in 1975, what is Jeri's gain basis for the stock?

• A)$7,500.
• B)$8,350.
• C)$9,017.
• D)$20,000.
• E)None of the above.

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Definitions:

Fair Values

An estimate of the market value of an asset or liability, based on current prices in an open market.

Reporting Date

The specific date on which a company's financial position is officially recorded and reported, often used in financial statements and reporting documents.

Earnings Surprise

When a company's actual reported financial results deviate from the expected figures, leading to an unexpected increase or decrease in its stock price.

Future Earnings

The projected income a company is expected to earn at a future date.