Donald sells stock with an adjusted basis of $38,000 to his son, Kiefer, for its fair market value of $30,000. Kiefer sells the stock three years later for $32,000. Kiefer will recognize a gain on the subsequent sale of

Question

Quizplus · Accepted Answer

Kiefer will recognize a gain of $0 because the loss Donald incurred on the sale to Kiefer ($8,000) is not recognized for tax purposes. Kiefer's basis in the stock is $30,000, and he sells it for $32,000, resulting in a $2,000 gain. However, this gain is offset by the unrecognized loss, resulting in no taxable gain.

Donald Sells Stock with an Adjusted Basis of $38,000 to His