On December 15, 2016 Ralph gave his daughter, Barbara, stock that had an adjusted basis...
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Accounting
On December 15, 2016 Ralph gave his daughter, Barbara, stock that had an adjusted basis to Ralph of $8,000 and a fair market value on the date of the transfer of $6,000). Ralph paid a gift tax attributable to this transfer. Barbara sold the stock on June 19, 2017 for $10,000. How much was Barbaras recognized gain and the character of the gain? a. $2,000 short-term capital gain b. $2,000 long-term capital gain c. $4,000 ordinary income d. $4,000 short-term capital gain e. We need to know the amount of the gift tax paid by Ralph in order to answer this question.
My answer is (a) 2,000 short term gain ..Is this correct and if not can you explain where I have error?
Stock held for 6 months
10,000-8,000=2,000.
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