On July 25,2018,Marilyn gives stock with a FMV of $7,500 and a basis of $5,000 to her nephew Darryl.Marilyn had purchased the stock on March 18,2018.Darryl sold the stock on April 18,2019 for $7,800.As a result of the sale,what will Darryl report on his 2019 tax return?

Question

Quizplus · Accepted Answer

When Darryl received the stock from Marilyn, his basis in the stock was the same as Marilyn's basis, which was $5,000. When Darryl sold the stock for $7,800, he realized a gain of $2,800 ($7,800 - $5,000). This gain is a long-term capital gain because Darryl held the stock for more than a year. Therefore, Darryl will report $2,800 LTCG on his 2019 tax return.

On July 25,2018,Marilyn Gives Stock with a FMV of $7,500