Question
Ned Stark gifted his son Jon, Dragon, Inc. stock worth $10,000 FMV on January 1st of this year. Prior to the gift, Ned owned the
Ned Stark gifted his son Jon, Dragon, Inc. stock worth $10,000 FMV on January 1st of this year. Prior to the gift, Ned owned the stock for 3 years and had a basis of $15,000. Jon subsequently sells the stock for $8,000 on September 1st of this year.
What are the tax consequences for Jon upon the sale? Please explain:
A. $2,000 short-term capital loss
B. $2,000 long-term capital loss (incorrect)
C. $7,000 short-term capital loss (incorrect)
D. $7,000 long-term capital loss
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Practical Management Science
Authors: Wayne L. Winston, Christian Albright
5th Edition
1497
