Paul Sells Property with an Adjusted Basis of $45,000 to His

question 86

Multiple Choice

Paul sells property with an adjusted basis of $45,000 to his daughter Dean, for $38,000. Dean subsequently sells the property to her brother, Preston, for $38,000. Three years later, Preston sells the property to Hun, an unrelated party, for $50,000. What is Preston's recognized gain or loss on the sale of the property to Hun?

• A) $0
• B) $5,000
• C) $12,000
• D) ($5,000)
• E) None of the above

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Definitions:

Connective

A symbol or word used in logic to connect clauses or sentences, indicating their relationship to one another.

Predicate

The part of a sentence or proposition that states something about the subject and typically contains a verb.

Colorful

Full of color or having vivid colors; often used to describe something that is visually striking or varied in color.

Idea

A concept or mental impression.