Father bought stock for 25k. When its value was 100k, he transferred it to son for 25k. Son resold the stock next day for 100k. How is father taxed? Son?
Father's G/L = 0. Bought it for 25k, sold for 25k. When a transfer is part gift part sale (sold at a discount), the gain is the extent that the AR is more than the amount paid. Transferee's basis in the property is the greater of: Amount paid or carryover basis AB for transferor is at time of transfer. Son's basis is 25k.