Jose sells stock with an adjusted basis of $65,000 to his son, Jesse, for its fair...
Jose sells stock with an adjusted basis of $65,000 to his son, Jesse, for its fair market value of $40,000. Jesse sells the stock one year later for $50,000. Jesse will recognize a gain(loss) on the subsequent sale of
A) $0.
B) $10,000 gain.
C) $15,000 gain.
D) $20,000 loss.
Homework Answers
Jesse receive the property as its fair market value = $ 40000.
Jesse sales the stock one year later for $ 50000.
So, jesse will recognise a gain on the subsequent sale . Amount realised in stock + fair market value of stock - adjusted basis = gain on stock.
In the given case gain on stock = $ 50000 + $ 40000 - $ 65000 .
= $ 25000.
So, answer is A $ 0.
Gain $ 25000 will be not given in answer.
So, answer is
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