Donald sells stock with an adjusted basis of $38,000 to his son,Kiefer,for its fair market value of $30,000.Kiefer sells the stock three years later for $32,000.Kiefer will recognize a gain on the subsequent sale of
A)$0.
B)$2,000.
C)($6,000).
D)($8,000).

Question

Quizplus · Accepted Answer

Kiefer's basis in the stock is $30,000, the same as its fair market value when he acquired it. When he sells the stock for $32,000, he recognizes a gain of $2,000.

Donald Sells Stock with an Adjusted Basis of $38,000 to His