In early year 8, Alice sold Tom, her son, 20 shares of common stock for $20,000. Alice

Question:

In early year 8, Alice sold Tom, her son, 20 shares of common stock for $20,000. Alice had paid $25,000 for the stock in year 2. In late year 8, Tom sold the stock to an unrelated third party for $35,000. How much gain must Tom report in his year 8 tax return for the sale of the stock?

a. $0

b. $5,000

c. $10,000

d. $15,000

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...

Fantastic news! We've Found the answer you've been seeking!