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Ann transfers ten shares of stock in XYZ, Inc. to Brad. Ann purchased the ten shares of stock for $10,000 (the adjusted basis); at the time of the transfer the stock has a fair market value of $100,000.
Problem a. Has Ann made a gift? If so, what is the amount of the gift?
Problem b. What if Ann sells the stock to Brad for $25,000?
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Clare's Super Cake Company makes very elaborate wed- ding cakes to order. The company's owner, Clare Cole, has provided the following data concerning the activity rates in its activity-based costing system:
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