LO.1, 2, 4 Marla bought a small sailboat for $20,000 in 2008. In January 2012, when the fair market value of the sailboat is $12,000, Marla makes a gift of it to Janine. No gift tax is due on the transfer. Six months later, Janine sells the boat for $10,500. What is Janine’s:

a. Adjusted basis in the sailboat?

b. Recognized gain or loss on the sale?

c. How would the answer to

(b) change if the fair market value at the date of the gift was $22,500?