LO.4 Harold receives a gift from Rose, his aunt. The fair market value of the property on the date of the gift is $15,000 (adjusted basis of $16,500), and Rose pays a gift tax of

$1,250. If Harold sells the property, describe circumstances in which the following will occur:

a. A recognized gain results.

b. A recognized loss results.

c. Neither a recognized gain nor a recognized loss results.