24.John purchases all of the common stock of Clarke Corporation for $280,000. The assets of the corporation
Fair Market Value
What is John's basis in the common stock he acquired?
James receives a gift of rare books valued at $10,000. The books have an adjusted basis of $6,000 to the
donor. No gift tax was paid on the transfer. Several months later, James sells the books to a professional
collector for $9,000. What is James 's gain or (loss) on the sale?
Sarah purchased a diamond bracelet for $3,000 while vacationing in Hong Kong during 1997. Sarah gives
the bracelet to her daughter Amy when she graduates from college in 2008. The bracelet is appraised at
$8,000 on that date. No gift tax liability was incurred. In October 2008, Amy sells the bracelet for $9,000.
What is the amount of gain Amy should recognize on the sale?