**Problem Statement:**Kevin received stock as a gift from his uncle. The stock was worth $4,820 as of the date of the gift, and his uncle had paid $2,390 for it several years ago. If Kevin sells the stock for $5,800, what is his taxable income from the sale?**Income Calculation:**\[\text{Income} \quad \$ \boxed{4,820}\]**Explanation:**This educational example discusses how to determine the taxable income when selling gifted stock. Kevin's uncle originally purchased the stock for $2,390. At the time the stock was gifted to Kevin, its value was $4,820.When Kevin sells the stock for $5,800, the taxable income is based on the increase in value from the original purchase price by the uncle ($2,390) to the selling price ($5,800).To calculate the taxable income, use the formula:\[ \text{Taxable Income} = \text{Selling Price} - \text{Original Purchase Price} \]\[ \text{Taxable Income} = 5,800 - 2,390 = 3,410 \]\[ \text{Taxable Income} = \$3,410 \]

Capital gains are the profits realized from the sale of a capital asset, such as stocks, real…

Kevin received stock as a gift from his uncle. The stock was worth $4,820 as of the date of the gift and his uncle had paid $2,390 for it several years ago. If Kevin sells the stock for $5,800, what is his taxable income from the sale? Income $ 4,820

Kevin received stock as a gift from his uncle. The stock was worth $4,820 as of the date of the gift and his uncle had paid $2,390 for it several years ago. If Kevin sells the stock for $5,800, what is his taxable income from the sale? Income $ 4,820

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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