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Problem - In early year 8, Alice sold Tom, her son, 20 shares of common stock for $20,000. Alice had paid $25,000 for the stock in year 2. In late year 8, Tom sold the stock to an unrelated third party for $35,000. How much gain must Tom report in his year 8 tax return for the sale of the stock?
a. $0
b. $5,000
c. $10,000
d. $15,000
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Which of the following describes the impact on consolidated financial statements of upstream and downstream transfers?
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