Mr. and Mrs. Trent divorced last year. Pursuant to the divorce, Mr. Trent transferred marketable securities (FMV $100,000; basis $67,000) to Mrs. Trent. This year, Mrs. Trent sold the securities for $112,000. Which of the following statements is true?

Question

Quizplus · Accepted Answer

Mrs. Trent's basis in the securities is the same as Mr. Trent's basis ($67,000) due to the transfer incident to divorce. When she sold them for $112,000, she recognized a gain of $112,000 - $67,000 = $45,000.

Mr and Mrs