Shontelle Received a Gift of Income-Producing Property with an Adjusted

question 146

Multiple Choice

Shontelle received a gift of income-producing property with an adjusted basis of $50,000 to the donor and fair market value of $40,000 on the date of gift.Gift tax of $6,000 was paid by the donor.Shontelle subsequently sold the property for $45,000.What is the recognized gain or loss?

• A)$5,000.
• B)$4,000.
• C)($5,000).
• D)($11,000).
• E)None of the above.

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Definitions:

Relevant Range

The range of activity within which the assumptions about fixed and variable costs in cost-volume-profit analysis are valid.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Contribution Margin

The difference between sales revenue and variable costs, representing the amount that contributes towards covering fixed costs and generating profit.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, used in financial analysis and grading.