Ben sells stock (adjusted basis of $25,000) to his son, Ray, for its fair market value of $15,000.Ray gives the stock
to his daughter, Trish, who subsequently sells it for $26,000.Ben's recognized loss is $0 and Trish's recognized gain is
$1,000 ($26,000 - $15,000 - $10,000).

Question

Quizplus · Accepted Answer

Ben's recognized loss would actually be $10,000 ($25,000 - $15,000) as he sold the stock for less than his adjusted basis. Trish's recognized gain would still be $1,000, but the statement incorrectly states that Ben has no recognized loss.

Ben Sells Stock (Adjusted Basis of $25,000) to His Son