Samantha gives her son, Steve, stock (basis of $72,000; fair market value of $68,000) and no gift tax results. When Steve subsequently sells the stock for $69,000, his recognized gain or loss is:
A)$0.
B)($3,000).
C)$1,000.
D)$69,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The basis of the stock in Steve's hands is $72,000, the same as Samantha's basis. When Steve sells the stock for $69,000, he realizes a loss of $3,000 ($72,000 - $69,000).

Samantha Gives Her Son, Steve, Stock (Basis of $72,000; Fair