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?

A.

Rosa's Income
From Stock Transfer
Rosa's Income
From Stock Sale
$0$7,000 capital gain

B.
Rosa's Income
From Stock Transfer
Rosa's Income
From Stock Sale
$13,000$7,000 capital gain

C.
Rosa's Income
From Stock Transfer
Rosa's Income
From Stock Sale
$13,000$20,000 capital gain

D.
Rosa's Income
From Stock Transfer
Rosa's Income
From Stock Sale
$0$20,000 capital gain
 


Answer: D

Business

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