In the current year, Megan, who is single, sells stock valued at $48,000 to Brooke for $13,000. Later that year, Megan gives Brooke $10,000 in cash. Assume the current year is 2021. Requirements a. What is the amount of Megan's taxable gifts? b. How would your answer to Part a change if Megan instead gave the cash to Karl?

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that ba…