Under the terms of their divorce agreement executed in August of this year, Clint transferred Beta, Inc. stock to his former wife, Rosa, as a property settlement. At the time of the transfer, the stock had a basis to Clint of $55,000 and a fair market value of $68,000. Rosa subsequently sold the stock for $75,000. What is the tax consequence of first the stock transfer and then the stock sale to Rosa?
Rosa's Income
From Stock Transfer Rosa's Income
From Stock Sale
$0 $20,000 capital gain
B)
Rosa's Income
From Stock Transfer Rosa's Income
From Stock Sale
$0 $7,000 capital gain
C)
Rosa's Income
From Stock Transfer Rosa's Income
From Stock Sale
$13,000 $7,000 capital gain
D)
Rosa's Income
From Stock Transfer Rosa's Income
From Stock Sale
$13,000 $20,000 capital gain
Answer: A
Tax
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