Brandy and Brady are 6-year-old twins. During 2021, each of the twins received eligible dividends of $1,000 on public company shares that were gifted to them by their father in July 2020. At the time of the gift, each block of shares had a fair market value of $9,500. Their father had acquired the two blocks of shares at a cost of $8,000 each. In December 2021, each twin sold their shares for $10,000.

REQUIRED:

Calculate and discuss the tax consequences, if any, for the twins and their father.