In 2017,Linda gave her son,Jonathan 425 shares of School Products Inc. ,common stock.Linda paid $9,350 for the stock in 2011.At the date of the gift,the FMV of the stock was $6,800.Assuming that there is no gift tax paid,if Jonathan sells the stock for $6,000,he will recognize:

Question

Quizplus · Accepted Answer

Jonathan will recognize an $800 loss because the sale price ($6,000) is less than the Fair Market Value (FMV) at the time of the gift ($6,800), and for loss determination, the FMV at the time of the gift is considered the basis.

In 2017,Linda Gave Her Son,Jonathan 425 Shares of School Products