Donald sells stock with an adjusted basis of $38,000 to his son, Kiefer, for its fair market value of $30,000. Kiefer sells the stock three years later for $32,000. Kiefer will recognize a gain on the subsequent sale of
A) $0.
B) $2,000.
C) ($6,000).
D) ($8,000).
A) $0.
The previously disallowed loss cannot reduce the gain below zero.
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