QUESTION 3 Brittany sold a parcel of investment real estate her son, Ridge, for $160,000. Her basis in the real estate was $175.000. During the year, Ridge sells the real estate to an unrelated third party for $185,000. How much gain or loss is recognized by Brittany on the sale to Ridge, and how much gain or loss is recognized by Ridge on the sale to the unrelated third party? No gain or loss for Brittany: $10,000 gain for Ridge 515,000 loss for Brittany, $25,000 gain for Ridge $15,000 loss for Brittany: $5,000 loss for Ridge No gain or loss for Brittany: 525,000 gain for Ridge 10 QUESTION 4 Margot and Johnny, calendar year, cash basis taxpayers; file a joint return. Before any of the capital asset transactions below, their taxable income is 590,100 and consists entirely of wages from their current jobs, During the year, they also had the following capital asset transactions: On February 1, 2018, they purchased Wal-Mart common stock for $57.000. They sold the stock on May 31 2020 for $65,000. On August 15, 2019, they purchased PG&E common stock for $42,000. They sold the stock on July 25, 2020 for $35,000 . On April 25 2018, they purchased Cisco common stock for $87.500. They sold the stock on May 21, 2020 for $100,000 What is their final taxable income after including the capital asset transactions, and what is their total tax liability 5103,600 taxable income: $13,427 tax liability 5107,500 taxable income: 515.252 tax liability 5107.600 taxable income: 514,027 tax liability 5103,600 taxable income: 511,042 tax liability