Your father gives you 100 shares of ABC stock on Dec. 31, 2006. He paid $2,500 for the shares ($25/share) in 1990 and the stock is now worth $3,500 as of the date of the gift.
On Dec. 31, 2016, you sell the ABC stock for $4,500 ($45/share).
What is your taxable gain?
A) A $1,000 long-term capital gain.
B) A $2,000 long-term capital gain.
C) There is no gain on the sale under current federal gift tax law.
D) A $1,500 long-term capital gain.
E) A $4,500 long-term capital gain.