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Contribution of listed stock to Black, Blue and Titus Partnership

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In August 2007, John Titus bought 200 shares of a listed stock for $25,000. In September 2007, Titus sold this stock for its fair market value of $28,000 to the partnership of Black, Blue, and Titus. Titus had a one-third interest in this partnership. In Titus' 2007 tax return, what amount should be reported as short-term capital gain as a result of this transaction?
-$0
-$1,000
-$2,000
-$3,000

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Solution Summary

The contribution of listed stock to Black, Blue and Titus Partnership is given. The short-term capital gain as a result of the transaction is determined.

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ANSWERS

Section 721(a) generally provides that no gain or loss shall be ...

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