Now consider the following alternatives involving loss of value. Assume Minnie's bracelet cost $1,000 and was worth $500 at the time that she gave it to Agatha. Agatha then gifts the braclet to Dora who later sold the bracelet for the following amounts. In each of these following cases, how much gain or loss will Dora report on the sale?

1. $1,200
2. $400
3. $750
4. Considering the practical impact of this and the prior problem, does it seem to you that taxpayers can shift the taxes associated with gains to the family and friends, but not losses? If so, why discriminate against losses, but not gains?
5. Same as 2 but the gift was from Agatha to her husband, Harley. See 1041(b)(2).