Chad Boudreaux is a 58-year old riverboat captain. He grew up in New Orleans and has worked on the Mississippi River his entire life. He works for a private company in New Orleans called Crescent River Pilots Inc. (CRP) and is married to Patricia, who is 35 years old. They have a seven-year-old son, named River. CRP sponsors a 401(k) plan that offers a Roth account and a separate ESOP. Chad has the following retirement plan accounts:

10. Assume Chad takes a distribution of the CRP stock several years from now when the stock is valued at $500,000. A few years later, Chad has a terrible accident and dies. The value of the CRP stock at the time of his death is $700,000. Patricia inherits the stock and sells it six months after Chad dies for $800,000. What are the tax implications of the sale?