Steve Gave Stock with an Adjusted Basis of $7,000 and an FMV

Multiple Choice

Steve gave stock with an adjusted basis of $7,000 and an FMV of $10,000 to Alice. No gift tax was paid. Later, Alice sold the stock for $12,000. The gain Alice will recognize on the sale is

A) $5,000.
B) $2,000.
C) $0.
D) none of the above