Todd gives Sam stock (adjusted basis of $72,000;fair market value of $69,000).Sam later sells the stock for $71,000.Sam's recognized loss is $1,000 ($71,000 amount realized - $72,000 adjusted basis).

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The recognized gain in this scenario is $1,000, not a recognized loss. This is because the amount realized ($71,000) is greater than the adjusted basis ($72,000). Therefore, the stock was sold at a gain.

Todd Gives Sam Stock (Adjusted Basis of $72,000;fair Market Value