Question $24$

Larry purchased real property for $$25,000$ and sold it the next year to Kim, Larry's

child, for the fair market value of $$18,000.$ Later, Kim sold the property to Harry,

who is not related to Kim or Larry, for $$25,000.$ What amount, if any, should be

recognized by Kim?

$$2,000$ loss

$$7,000$ loss

$$5,000$ gain

So

$$7,000$ gain