On July 25,2018,Karen gives stock with a FMV of $7,500 and a basis of $8,000 to her nephew Bill.Karen had purchased the stock on March 18,2018.Bill sold the stock on April 18,2019 for $6,000.As a result of the sale,what must Bill report on his 2019 tax return?

Question

Quizplus · Accepted Answer

Bill's basis in the stock is $8,000, the same as Karen's basis. Bill sold the stock for $6,000, resulting in a $2,000 loss. Since Bill held the stock for less than one year, the loss is a short-term capital loss.

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