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A. 0
B. 1
C. 2
D. 3
Answer: C

NEW QUESTION: 3
Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was $10,000 and the stock's fair market value was $15,000. No gift taxes were paid. What is Pat's basis in the stock for computing gain?
A. $5,000
B. $0
C. $15,000
D. $10,000
Answer: D
Explanation:
Explanation
Choice "c" is correct. Property acquired as a gift generally retains the rollover cost basis as it had in the hands of the donor at the time of the gift. Basis is increased by any gift tax paid that is attributable to the net appreciation in the value of the gift. Since there were no gift taxes paid, Pat's basis for computing a gain is the rollover cost (basis), $10,000.
Choices "a", "b", and "d" are incorrect, per the explanation above.