Under the terms of their divorce agreement, Tom transferred Google stock to his
ID: 2444063 • Letter: U
Question
Under the terms of their divorce agreement, Tom transferred Google stock to his former wife Tammy, as a property settlement. At the time of the transfer, the stock had a basis to Tom of $35,000 and a fair market value of $40,000. What is the tax consequence to Tom and what is Tammy’s basis in the stock?
1)
Tom has no gain or loss; Tammy’s basis is $35,000
2)
Tom has a gain of $10,000; Tammy’s basis is $35,000
3)
Tom has a gain of $10,000; Tammy’s basis is $40,000
4)
Tom has no gain or loss; Tammy’s basis is $40,000
please do not guess, explain your answer
Explanation / Answer
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