7. In Year 4, Richards parents sold 100 shares of Techno stock to Richard for $55,000. The parents paid $75,000 for the stock in Year 1. Subsequently in Year 4, Richard sold the stock to an unrelated third party for $80,000. What amount of gain should Richard report on the Year 4 income tax return?

1. $0

2. $5,000

3. $20,000

4. $25,000