In 2013, Aaron purchased a classic car that he planned to restore for $12,000. However, Aaron is too busy to work on the car and he gives it to his daughter Ellie in 2017. At this time, the fair market value of the car has declined to $10,000. Aaron paid no gift tax on the transaction. Ellie completes some of the restoration herself with out-of-pocket costs of $5,000. She later sells the car for $30,000. What is Ellie's recognized gain or loss on the sale of the car?

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The Answer of In 2013, Aaron purchased a classic car that he planned to restore for $12,000. However, Aaron is too busy to work on the car and he gives it to his daughter Ellie in 2017. At this time, the fair market value of the car has declined to $10,000. Aaron paid no gift tax on the transaction. Ellie completes some of the restoration herself with out-of-pocket costs of $5,000. She later sells the car for $30,000. What is Ellie's recognized gain or loss on the sale of the car?

In 2013, Aaron Purchased a Classic Car That He Planned