On June 1, 2018 your grandfather gave you his old car with an adjusted basis of $8,000 and a fair market value of $5,000. You had the engine rebuilt at a cost of $2,500 and sold it to an unrelated party in 2019 for $10,000. What do you report on your 2019 tax return from this sale?

$2,500 long term capital gain Zero $5,000 long term capital gain $500 long term capital Loss