On January 15 of the current year, Henry sold stock with a basis of $7,000 to his grandson Isaac for $4,000, its fair market value on that date. On December 30 of the current year, Isaac sold the same stock for $8,000 to a friend in a bona fide, arms-length transaction. As a result of these transactions, Isaac has a recognized gain of $4,000. Isaac has a recognized gain of $1,000. Henry has a recognized loss of $3,000. Neither Henry nor Isaac has a recognized gain or loss