Blair and Britain divorce in the current year. Blair agrees to transfer her interest in their principal residence to Britain. They had purchased the home for $80,000 four years before the divorce. At the time of the divorce, the house is worth $120,000.

REQUIRED:
Determine the income tax consequences of this transfer of property for Blair and Britain. Search a tax research database and find the relevant authority(ies) that forms the basis for your answer. Your answer should include the exact text of the authority(ies) and an explanation of the application of the authority to Britain and Blair’s facts. If there is any uncertainty about the validity of your answer, indicate the cause for the uncertainty.