1. John buys shares of stock in Acme Corp. on January 1, 2018 for $50. He gifts...

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Accounting

1.           John buys shares of stock in Acme Corp. on January 1, 2018 for $50.He gifts the stock to Mary on July 1, 2018 when the stock has afair market value (fmv) of $60. Mary sells the stock on September 1, 2018 for $80.
              a.           What is the gain /loss recognized byJohn?      ________
                             What is the character of the gain/loss? _
              b.           What is the gain /loss recognized by Mary?    __
                             What is the character of the gain/loss? _
2.           Same facts as in Question 1 except the value of the shares when thegift is made is $40.
              a.           What is the gain /loss recognized by John?__
                             What is the character of the gain/loss? _
              b.           What is the gain /loss recognized by Mary?    __
                             What is the character of the gain/loss? _
3.           Same facts as in Question 1 except Mary Sells the stock on May 1,2019.
              a.           What is the gain /loss recognized by John?    __
                             What is the character of the gain/loss? _
              b.           What is the gain /loss recognized byMary?
                             What is the character of the gain/loss? _____

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4.0 Ratings (714 Votes)

1 a Gainloss recognized by John No gainloss will be recognized by John as he gifted the stock and has not sold them He does not received any selling price B Gainloss recognized by Mary Selling Price of Stock 80 Cost basis of Stock cost basis of John 50 Gain 30 The Character of gain is See Answer

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