Amal gave his sister, Dora 100 shares of stock on April 3, 2014. Amal originally paid $3,100 for the stock on January 5, 2014. At the date of the gift, the fair market value of the stock was $2,800. If no gift tax is paid and Dora sells the stock for $2,700 on August 31, 2015, she will recognize:

Question

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Since Dora received the stock as a gift, her cost basis for determining gain or loss upon selling the stock is Amal's original cost basis of $3,100. Since she sold the stock for $2,700, she will recognize a long-term loss of $400 ($2,700 proceeds - $3,100 basis). The holding period for gifted stock includes the donor's holding period, so the stock is considered long-term since Amal held it for more than one year.

Amal Gave His Sister, Dora 100 Shares of Stock on April