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Y received stock as a gift from her father in 2019. Her father purchased the stock...

Y received stock as a gift from her father in 2019. Her father purchased the stock several years ago of $30,000. The stock was worth $20,000 at the time the gift was received. Y sold the stock for $18,000 in 2020.

How much gain or loss, if any, should Y report on her 2020 tax return?

Assume the same facts as above, except that Y sold the stock for $25,000. How much gain or loss, if any, should Y report on her 2020 tax return?

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Answer #1

case 1 If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property.The basis for figuring loss is its FMV when you received the gift plus or minus any required adjustments to basis while you held the property.

CALCULATION OF CAPITAL LOSS = SALES PRICE LESS FMV OF THE GIFT AT THE TIME OF RECEIPT

=$18000 - $20,000

= $2000 CAPITAL LOSS

CASE 2 CAPITAL LOSS = $25000- $30,000

CAPIAL LOSS= $5000

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