Tracy gave stock with an adjusted basis of $18,000 and an FMV of $15,000 to her nephew Phil. No gift tax was paid. Phil sold the stock for $16,000. The gain or loss Phil will recognize on the sale is
A) $1,000 gain.
B) $0.
C) $1,500 loss.
D) none of the above
B) $0
Phil's basis for determining gain is $18,000. His basis for determining loss is $15,000. If the gift property is sold for an amount between the two basis amounts, then no gain or loss is recognized.
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