Terry gives Brenda 1,000 shares of stock he had purchased several years ago for $5,000. On the date of the gift, the stock has a fair market value of $4,000. Brenda sells the 1,000 shares for $5,500 one month after the gift, Brenda realizes a

Question

Quizplus · Accepted Answer

Since Terry gifted Brenda the stock, she takes on his cost basis of $5,000. When she sells the stock for $5,500, she realizes a gain of $500. Since she held the stock for over a year, it is considered a long-term capital gain.

Terry Gives Brenda 1,000 Shares of Stock He Had Purchased