Gary receives $40,000 worth of Quantro, Inc., common stock from the estate of his late grandmother. He receives a $100 cash dividend six months later. Before the end of the year, Gary sells the stock for $42,000. Due to these events, how much must Gary include in his gross income for the year?

Question

Quizplus · Accepted Answer

Gary must include the $100 cash dividend and the $2,000 capital gain from selling the stock ($42,000 sale price - $40,000 basis) in his gross income, totaling $2,100.

Gary Receives $40,000 Worth of Quantro, Inc