Hilliard receives a gift of stock from Martha on June 1 of the current year. Martha paid $15,000 for the stock several years ago. Martha pays a gift tax of $400 on the transfer.
I.If the fair market value of the stock on June 1 of the current year is $20,000, Hilliard has a basis in the stock of $15,100.
II.If the fair market value of the stock on June 1 of the current year is $14,000, and Hilliard sells the stock for $13,000 on June 2 of the current year, Hilliard realizes a loss on the sale of $1,000.

Question

Hilliard receives a gift of stock from Martha on June 1 of the current year. Martha paid $15,000 for the stock several years ago. Martha pays a gift tax of $400 on the transfer.
I.If the fair market value of the stock on June 1 of the current year is $20,000, Hilliard has a basis in the stock of $15,100.
II.If the fair market value of the stock on June 1 of the current year is $14,000, and Hilliard sells the stock for $13,000 on June 2 of the current year, Hilliard realizes a loss on the sale of $1,000.
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Quizplus · Accepted Answer

The Answer of Hilliard receives a gift of stock from Martha on June 1 of the current year. Martha paid $15,000 for the stock several years ago. Martha pays a gift tax of $400 on the transfer.
I.If the fair market value of the stock on June 1 of the current year is $20,000, Hilliard has a basis in the stock of $15,100.
II.If the fair market value of the stock on June 1 of the current year is $14,000, and Hilliard sells the stock for $13,000 on June 2 of the current year, Hilliard realizes a loss on the sale of $1,000.
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Hilliard Receives a Gift of Stock from Martha on June