In Addition to Other Gifts, Megan Made a Gift of Stock

Multiple Choice

In addition to other gifts, Megan made a gift of stock to Jeri in 1976. Megan had purchased the stock in 1974 for $7,500. At the time of the gift, the stock was worth $20,000. If Megan paid $850 of gift tax on the transaction in 1976, what is Jeri's gain basis for the stock?

A) $7,500
B) $8,350
C) $9,017
D) $20,000
E) None of the above