In addition to other gifts,Megan made a gift of stock to Jeri in 1975.Megan had purchased the stock in 1973 for $5,000.At the time of the gift,the stock was worth $7,500.If Megan paid $360 of gift tax on the transaction in 1975,what is Jeri's gain basis for the stock?
A)$5,000.
B)$5,120.
C)$5,360.
D)$7,860.
E)None of the above.

Question

Quizplus · Accepted Answer

Megan's basis in the stock is $5,000. The gift tax paid of $360 is added to the basis, resulting in a basis of $5,360 for Jeri.

In Addition to Other Gifts,Megan Made a Gift of Stock