Answer:
D. $16,000 $14,000 $78,000
Explanation:
<em>Step 1: Determine Terry's adjusted basis</em>
Terry's adjusted basis=$80,000
<em>Step 2: Determine Terry's recognized loss</em>
Terry's recognized loss=Terry's adjusted basis-fair market value at sale
where;
Terry's adjusted basis=$80,000
fair market value at sale=$64,000
replacing;
Terry's recognized loss=(80,000-64,000)=$16,000
Terry's recognized loss=$16,000
<em>Step 3: Determine Jake's recognized gain</em>
Jake's recognized gain=Fair market value at sale-Jake's adjusted basis
where;
Fair market value at sale=$78,000
Jake's adjusted basis=$64,000
replacing;
Jake's recognized gain=(78,000-64,000)=$14,000
<em>Step 4: Determine Pamela's Basis</em>
Pamela's Basis=fair market value at sale=$78,000