A and E are a married couple living in a community property state.E owned an apple orchard in which she had a basis of $70,000.She sold the orchard to A last year for its fair market value of $100,000.They remain happily married.What gain did E recognize on the sale?
A)$0
B)$30,000
C)$70,000
D)$100,000

Question

Quizplus · Accepted Answer

In a community property state, transactions between spouses are generally not recognized for tax purposes. Therefore, E would not recognize any gain on the sale of the orchard to A.

A and E Are a Married Couple Living in a Community