Georgia sells stock she purchased for $20,000 to her brother Billy for $12,000. Two years later, Billy sells the stock to Allie, an unrelated individual, for $22,000. What is Billy's recognized gain or loss?

Question

Quizplus · Accepted Answer

Billy's recognized gain is calculated based on the difference between his selling price ($22,000) and his purchase price ($12,000), which equals a $10,000 gain. However, because the question specifically asks for the recognized gain or loss, and the correct calculation based on the given numbers results in a $10,000 gain, it appears there was a misunderstanding in the initial response. The correct answer should reflect the gain based on the transaction details provided, which is a $10,000 gain, indicating a discrepancy in the initial response provided.

Georgia Sells Stock She Purchased for $20,000 to Her Brother