On July 25,2016,Karen gives stock with a FMV of $7,500 and a basis of $8,000 to her nephew Bill.Karen had purchased the stock on March 18,2016.Bill sold the stock on April 18,2017 for $6,000.As a result of the sale,what must Bill report on his 2016 tax return?

Question

Quizplus · Accepted Answer

A)$6,000 - $7,500 = ($1,500).The donee's loss basis is the lessor of FMV or adjusted basis on the date of the gift.Since FMV is used,the donee's holding period begins on the date of the gift.

On July 25,2016,Karen Gives Stock with a FMV of $7,500