On July 25,2013,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 18,2013. Bill sold the stock on April 18,2014 for $6,000.As a result of the sale,what must Bill report on his 2014 tax return?

Question

Quizplus · Accepted Answer

Bill must report a short-term capital loss (STCL) of $1,500 because he sold the stock within one year of receiving it, and the loss is calculated based on the difference between the sale price ($6,000) and the fair market value at the time of the gift ($7,500).

On July 25,2013,Karen Gives Stock with a FMV of $7,500