Jacob sold XYZ stock valued at $23,900 to his son, Luke, for $13,900. Jacobs basis in the stock is $18,900. Which of the following is correct? Jacob reports a gift of $23,900 on Form 709 and a capital loss of $10,000 ($13,900 $23,900) on Form 1040. Lukes basis in the stock is $13,650. No reporting is required because the transfer was between immediate family members. Jacob is not required to report the $10,000 gift ($23,900 $13,900) and is not allowed to deduct the $5,000 loss ($13,900 $18,900 basis). If Luke sells the stock, his basis for gain is $18,900, and his basis for loss is $13,900. Jacob reports a gift of $23,900. Lukes basis in the stock is $13,900.