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Part $1$

On October $21$ of the current$$ year, David receives stock of Western Corporation as a gift from his$$ grandfather, who acquired the stock on January$20,1995.$ Under what conditions would$$ David's holding period start$$ on$?$

October $22$ of the current$$ year?

January$21,1995?$

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Part $1$

a$.$ October $22$ of the current$$ year?

A$.$

October $22$ of the current year cannot be used as the holding period start date because it can only be the date of the gift.

B$.$

$$David$\text{'}$s holding period starts on October $22$ of the current year if he uses the fair market value$($FMV$)$ at the date of the gift to determine his basis.

Your answer is correct.

C$.$

$$David$\text{'}$s holding period starts on October $22$ of the current year if he agrees to hold the stock for more than $1$ year.

D$.$

$$David$\text{'}$s holding period starts on October $22$ of the current year if he agrees to hold the stock for less than $1$ year.

Part $2$

b$.$ January$21,1995?$

A$.$

His holding period starts on January$21,1995$ if he agrees to hold the stock for less than $1$ year.

B$.$

His holding period starts on January$21,1995$ if he uses his$$ grandfather's basis.

C$.$

$$David$\text{'}$s holding period will never start on January$21,1995.$

D$.$

His holding period starts on January$21,1995$ if he agrees to hold the stock for more than $1$ year.