Discussion Question 4-10 (LO. 3,5) Wade paid $7,000 for an automobile that needed substantial repairs. He worked nights and weekends to restore the car and spent $2,400 on parts for it. He knows that he can sell the car for $13,000, but he is very wealthy and does not need the money. On the other hand, his daughter, who has very little income, needs money to make the down payment on a house. a. Would it matter, after taxes, whether Wade sells the car and gives the money to his daughter or whether he gives the car to his daughter and she sells it for $13,000? Select "True" or "False" regarding the tax consequences for each scenario. Wade should give the car to his daughter to sell. She will not have to pay taxes on the subsequent sale of the car, since it was acquired as a gift. If Wade sells the car, he would be taxed on the gain. However, if he gives the car to his daughter and she sells, the daughter would be taxed on any gain. Wade should sell the car. If Wade gives his daughter the car, he will have to pay gift tax as well as income tax, since his daughter is considered a related party. Wade should sell the car, since his taxable gain will be less due to the time he spent restoring the car than if his daughter sells the car. b. Assume Wade gave the car to his daughter after he had arranged for another person to buy it from his daughter. The daughter then transferred the car to the buyer and received $13,000. Who is taxed on the gain? If there is a binding commitment to sell the car, is taxed on the gain. If there is no binding commitment, is taxed on the gain. Wade his daughter neither party