Sheila, inherited a Peanuts cartoon from her mother more than a year ago. At the time of her death, the cartoon was valued at $3,000. Originally, her mother had purchased it at a charity auction for $1,000. At the alternative valuation date the cartoon was valued at $2,500. It is a valuable cartoon as it featured a character, Charlotte Braun, included in only 10 comic strips. It is currently listed and is expected to sell at an auction house for $10,000 tomorrow. She will have to pay a commission of 3% to sell it. She intends to split the proceeds with her sister. What is the tax impact of her selling the Peanuts cartoon? Both Happy and her sister are at 22% marginal tax bracket and the capital gain rate is 15%.

Also, address the gift to her sister.