Peter owned dividend paying shares of a public corporation. The shares appreciated in value since the time Peter purchased them. Peter sells all shares to his daughter Brianna, who is 12 years old, at a price that is less than today’s value of the shares.

A) Discuss the tax consequences.

B) What are the tax consequences if Peter sells shares to Mary, his spouse, at a price that is less than the shares’ market value but more than its cost?