Tax Basis in Gifted Stock
Not what you're looking for?
1. Boyd Smith acquires 100 shares of Evans Corporation stock for $3,000 on January 8, 2007. He gave the stock to his daughter Susan on January 8, 2008, when the fair market value was $2,400. On March 22, 2008, Susan sold the stock for $1,500. What is the nature and the amount of the gain or loss for Susan in 2008?
Purchase this Solution
Solution Summary
This solution provides both the Internal Revenue Code cite for determining a taxpayer's adjusted basis in stock gifted to her, and the computation of the basis and treatment of any gain or loss resulting from its disposition.
Solution Preview
IRC Section 1001(a) states that "The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized." IRC Section 1015(a) provides that "If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period before the date of the ...
Purchase this Solution
Free BrainMass Quizzes
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.