You bought stock in 2003 for $17,000. In 2007, you sell this stock to your daughter at fair market value for $9,000. What is the loss deduction you may claim on your 2007 return?
Answer to Tax Quiz
Correct answer: $0. You may not deduct this loss, because you made the sale to a related party, your daughter.
The related-party rules apply. If she sells the stock at a loss, her basis is $9,000. If she sells the stock at a gain, ... Log in to view full article.