Laura's father, Albert, gave Laura a gift of 500 shares of Liba Corporation common stock in 2010. Albert's basis for the Liba stock was $4,000. At the date of this gift, the fair market value of the Liba stock was $3,000.
If Laura sells the 500 shares of Liba stock in 2010 for $5,000, her basis is
a) $5,000
b) $4,000
c) $3,000
d) $0
Answer: b) $4,000
If Laura sells the 500 shares of Liba stock in 2010 for $2,000, her basis is
a) $4,000
b) $3,000
c) $2,000
d) $0
Answer: b) $3,000
If Laura sells the 500 shares of Liba stock in 2010 for $3,500, what is the reportable gain or loss in 2010?
a) $3,500 gain.
b) $500 gain.
c) $500 loss.
d) $0.
Answer: d) $0.