John purchased 300 shares of IBM at $27 per share on 7/1/17. Answer each question below ignoring any costs of purchase or sale (broker fees). EACH OF THE QUESTIONS IS INDEPENDENT so always begin your calculations with Johns original basis of $27 per share. Gains or losses are long-term if the holding period is greater than one year. Otherwise they are short-term.

3. John gifts the IBM stock to his son Jack on 3/1/18 when the stock is worth $38 per share. Jack sells it on 6/1/18 for $40 per share. What gain or loss will Jack recognize on the sale? Is it short term or long term?