Asked by Spencer Baker on Jul 14, 2024
Verified
Greg received a gift of 300 shares of stock from his sister,Terri.The stock cost Terri $30,000 five years ago.At the date of the gift,the stock is worth $22,500.
a.If the stock is sold for $34,000,calculate the amount and nature of the gain or loss.
b.If the stock is sold for $20,000,calculate the amount and nature of the gain or loss.
c.If the stock is sold for $28,000,calculate the amount and nature of the gain or loss.
Gifted Stock
Equity in a company given to someone at no cost, often as part of an estate planning strategy to transfer wealth or as an incentive or reward.
Gain Or Loss
The difference between the sale price of an asset and its original purchase price, indicating a financial profit or loss.
Nature Of Gain
The classification of profit obtained from various sources such as capital gains, business operations, or investment income, influencing tax treatment.
- Calculate the gain or loss from the sale of gifted stock and understand its tax treatment.
- Clarify the tax documentation needs for capital gains and losses.
Verified Answer
b.$2,500 long-term loss
c.No gain/loss
Learning Objectives
- Calculate the gain or loss from the sale of gifted stock and understand its tax treatment.
- Clarify the tax documentation needs for capital gains and losses.
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