On July 25,2012,Marilyn gives stock with a FMV of $7,500 and a basis of $5,000 to her nephew Darryl.Marilyn had purchased the stock on March 18,2012.Darryl sold the stock on April 18,2013 for $7,800.As a result of the sale,what will Darryl report on his 2013 tax return?

Question

Quizplus · Accepted Answer

Darryl's basis in the stock is the same as Marilyn's basis, which is $5,000. When Darryl sold the stock for $7,800, he had a capital gain of $2,800 ($7,800 - $5,000). Since the stock was held for more than a year, this gain is considered a long-term capital gain (LTCG). Therefore, Darryl will report a $2,800 LTCG on his 2013 tax return. Choice D is the correct answer.

On July 25,2012,Marilyn Gives Stock with a FMV of $7,500