In February 2019, Judy Judd gave her son Steven a Mercedes for his graduation gift.

The automobile had a basis of $55,000 to Judy but was worth $85,000 at the time of the gift. Judy paid $21,000 gift taxes on the gift. The taxable gift is $70,000 after the

$15,000 exclusion, Assume that Steven used the car for business purposes.

a. What is Steven's gain or loss if the automobile is sold in April 2019 for

$86,000?

b. What is the gain or loss recognized if the car is sold for $56,000?

c. What is the gain or loss recognized if the fair market value at the time of the gift had been $45,000 instead of $85,000 and Steven sold the car for $86,000?

d. What is the answer to

(c) if the selling price is $44,000?

e. What is the answer to

(c) if the selling price is $47,000?