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Mike purchased some stock for $10,000. Mike gave the stock to Kyle when the stock was worth $15,000. Kyle later sold the stock for $18,000.

Mike purchased some stock for $10,000.

  1. Mike gave the stock to Kyle when the stock was worth $15,000. Kyle later sold the stock for $18,000. What is Kyles gain or loss on the sale? What is the character of the gain or loss (Character is short for characteristic, i.e., ordinary, capital, 1231, 1245, 1250, etc.)?
  2. Kyle inherited the stock from Mike when the stock was worth $15,000. Kyle later sold the stock for $18,000. What is Kyles gain or loss on the sale? What is the character of the gain or loss

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