Padraic purchased 50 shares of stock as an investment for the purchase price of $1,500 in 2012. In 2015 when the fair market value of the stock was $2,000, Padraic gave the stock to his sister, Fiona. If no gift tax is paid and Fiona sells the stock for $1,750 she will recognize:

Question

Quizplus · Accepted Answer

Since Padraic gave the stock to Fiona, she takes his basis of $1,500. When she sells the stock for $1,750, she has a gain of $250 ($1,750 - $1,500). Therefore, the correct answer is A) $250 gain.

Padraic Purchased 50 Shares of Stock as an Investment for the Purchase