laura rsquo s father albert gave laura a gift of 500 shares of liba corporation comm 624680

Items 1 through 3 are based on the following data:

Laura’s father, Albert, gave Laura a gift of 500 shares of Liba Corporation common stock in 2007. Albert’s basis for the Liba stock was $4,000. At the date of this gift, the fair market value of the Liba stock was $3,000.

If Laura sells the 500 shares of Liba stock in 2007 for $5,000, her basis is

1. $5,000
2. $4,000
3. $3,000
4. $0

If Laura sells the 500 shares of Liba stock in 2007 for $2,000, her basis is

1. $4,000
2. $3,000
3. $2,000
4. $0

If Laura sells the 500 shares of Liba stock in 2007 for $3,500, what is the reportable gain or loss in 2007?

1. $3,500 gain.
2. $ 500 gain.
3. $ 500 loss.
4. $0.