Daniel receives 400 shares of A&M Corporation stock from his aunt on May 20, 2013, as a gift when the stock has a $60,000 FMV. His aunt purchased the stock in 2005 for $42,000. The taxable gift is $60,000 because she made earlier gifts to Daniel during 2013 and used the annual exclusion. She paid a gift tax of $9,300 on the gift of A&M stock to Daniel.
Daniel also inherited 300 shares of Longhorn Corporation preferred stock when his uncle died on November 12, 2012, when the stock's FMV was $30,000. His uncle purchased the stock in 1995 for $27,600. Determine the gain or loss on the sale of A&M and Longhorn stock on December 15, 2013, under each alternative situation below.
a. A&M stock was sold for $62,600, and Longhorn stock was sold for $30,750.
b. A&M stock was sold for $58,200, and Longhorn stock was sold for $28,650.
c. Assume the same as in Part a except his aunt purchased A&M stock for $71,000 and his uncle purchased Longhorn stock for $31,200.