Clara received from her Aunt Sona, property with a FMV at the date of the gift of $38,800. Aunt Sona purchased the property five years ago for $32,600. Clara sold the property for $40,000. Assume Aunt Sona does not have MAGI of over $200,000.

A) What is the basis to Clara?

B) What is Clara’s gain on the sale?

C) If Clara is in the 33% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)?

D) If Clara is in the 15% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)?