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:

Empirical Support

Evidence that is based on observation or experiment, supporting the effectiveness or validity of a concept or treatment.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to severely restricted food intake and starvation in pursuit of thinness.

Therapy

Treatment intended to relieve or heal a disorder, often by psychological rather than medical means.

Cognitive-Behaviour Therapy

A psychotherapeutic approach that addresses dysfunctional emotions, maladaptive behaviors, and cognitive processes through a number of goal-oriented, explicit systematic procedures.