Determine Initial Basis Of Property Practice Test

Marlena receives stock as a gift from her uncle. The uncle's adjusted basis in the stock was $20,000, and the fair market value on the date of the gift was $35,000. No gift tax was paid. What is Marlena's basis in the gifted stock for purposes of determining gain?

Derek receives stock as a gift. The donor's adjusted basis was $50,000, and the fair market value on the date of the gift was $30,000. No gift tax was paid. Derek later sells the stock for $25,000. What is Derek's recognized loss?