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In Year 1, Mr. Sonny made a gift to his brother, Carlton, of his interest in a small business corporation with adjusted basis of $120,000

In Year 1, Mr. Sonny made a gift to his brother, Carlton, of his interest in a small business corporation with adjusted basis of $120,000 and FMV of $140,000. Mr. Sonny paid no gift tax on the transfer. Carlton sold that interest for $60,000 in January Year 7. 


What are the amount and the character of Carlton's loss?

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