Brittany Callihan sold stock (basis of $184,000) to her son, Ridge, for $160,000, the fair market value.

a.) What are the tax consequences to Brittany

b.) What are the tax consequences to Ridge if he later sells the stock for $190,000? For $152,000? For $174,000?

c.) Prepare an INTERNAL MEMO showing the results for part A and B

(the format for the memorandum is shown in the screenshot)

November 11,2022 TAX FILE MEMORANDUM FROM: John J. Jones SUBJECT: Fred and Megan Martel Income from Coin Discovery Today I met with Fred and Megan Martel related to a request for tax assistance. In 2017, the Martels purchased 40 acres of land for $195,000; they built their current residence on the property in 2018 . In March 2022, while walking on a remote part of their property, they spotted something shiny on the ground. They started digging and eventually unearthed eight metal cans containing more than 1,400 rare gold coins in $5,$10, and $20 denominations dated from 1846 to 1895 . The face value of the gold coins is about $28,000, and the coins are in mint condition. As required by state law, the Martels turned over the coins to the state for disposition. For a period of six months, the state was required to publicize the find and ask if anyone could prove ownership. When no one came forward, the coins were returned to the Martels in October 2022. ISSUE: What are the tax implications of the Martels' coin discovery? FINDINGS: Internal Revenue Code 61 defines gross income as "all income from whatever source derived." Further, Treasury Regulation $1.6114 (a) states that "a treasure trove, to the extent of its value in United States currency, constitutes gross income for the taxable year in which it is reduced to undisputed possession." The fact that the state returned the coins to the Martels in October 2022 appears to indicate "undisputed possession" as required by Reg $1.6114(a). As a result, their.9rns