Terry owns Lakeside, Inc. stock (adjusted basis of $80,000), which she sells to her brother, Jake, for $64,000 (its fair market value). Eighteen months later, Jake sells the stock to Pamela, a friend, for $78,000 (its fair market value). What is Terry’s recognized loss, Jake’s recognized gain or loss, and Pamela’s adjusted basis for the stock?
?
Terry's Recognized Loss Jake's Recognized Gain (Loss) Pamela's Basis
A. $ -0- $ -0- $78,000
B. $ -0- $14,000 $64,000
C. $ -0- $14,000 $78,000
D. $16,000 $14,000 $78,000
E. None of these.
Answer: A
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