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NEW QUESTION: 1
As her college graduation present, Jennifer's grandmother gave her 200 shares of the stock of IBM. Her
grandmother had purchased the shares for $54 a share in October 2002, and the stock was selling for
$ 132 a share on the day of Jennifer's graduation eight years later. Eight months after her graduation,
Jennifer decides to sell the shares to get money to help with the down payment on a condo she is
purchasing. If IBM is selling for $125 on the day of the sale, what are the tax consequences of this sale for
Jennifer?
A. Jennifer will have taxable income of $14,200, which will be taxed as long-term capital gain income at a
tax-preferred rate.
B. Jennifer will have taxable income of $14,200, which will be taxed as long-term capital gain income at a
tax-preferred rate.
C. Jennifer will have taxable income of $15,600, which will be taxed as long-term capital gain income at a
tax-preferred rate.
D. Jennifer will have a loss of $1,400, which will be treated as a short-term capital loss for tax purposes.
Answer: A
Explanation:
If Jennifer's grandmother gave her stock that she had purchased for $54 a share on a day it
was selling for $132, and Jennifer then sold it eight months later for $125, Jennifer will have taxable
income of $14,200, which will be taxed as long-term capital gain income at a tax-preferred rate. The cost
basis of a gift is the price that the donor paid for it--$54, in this case. Jennifer's gain is, therefore, ($125 -
$ 54) x 200 shares = $14,200. The holding period of the donor also becomes the holding period for the
gift's recipient, so the $14,200 will be treated as long-term capital gain income since her grandmother had
owned the stock for eight years prior to gifting it.
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B. Means
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D. Analysis
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Which type of SVM needs to be created to complete the installation?
A. system SVM
B. data SVM
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Answer: B
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