Conner purchased 300 shares of Zinco stock for $30,000 in 2006. On May 23, 2010, Conner sold all the stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss during 2010. On July 26, 2010, Alice sold the 300 shares of Zinco for $25,000.
What amount of the loss from the sale of Zinco stock can Conner deduct in 2010?
a) $0
b) $3,000
c) $5,000
d) $10,000
Answer: a) $0
What was Alice's recognized gain or loss on her sale?
a) $0.
b) $5,000 long-term gain.
c) $5,000 short-term loss.
d) $5,000 long-term loss.
Answer: a) $0.