Sadie Sold 10 Shares of Stock to Her Brother,George,for $500

Sadie sold 10 shares of stock to her brother,George,for $500 six months ago.Sadie had purchased the stock for $600 two years earlier.If George sells the stock for $700,what is the amount and character of his recognized gain or loss in the current year?

A) $0.
B) $100 short-term capital gain.
C) $100 long-term capital gain.
D) $200 short-term capital gain.
E) None of thesE.Sadie's loss of $100 is deferred and her brother receives a dual basis in the stock.If he sells the stock at a gain,he receives a $600 carryover basis from Sadie.If he sells the stock at a loss he receives a $500 cost basis in the stock.Sadie's basis and holding period are transferred to George,so he receives a $100 ($700 proceed less $600 basis) long-term gain on the sale.