Spouse #1 gifted shares of GreatCo, a public corporation, to their spouse, Spouse #2, on August 1

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Question:

Spouse #1 gifted shares of GreatCo, a public corporation, to their spouse, Spouse #2, on August 1 of 2020. At the time of the gift, the shares had an adjusted cost base of $60,000 and a fair market value of $75,000. During 2021 Spouse #2 received dividends of $2,000 from GreatCo, which were reinvested and generated $100 in interest income. Also during 2021 Spouse #2 sold all of the shares of GreatCo for $84,000. What were the effects of the above transactions on the net income of each spouse?

A. Spouse #1 - $26,000; Spouse #2 - $100

B. Spouse #1 - $0; Spouse #2 - $26,100

C. Spouse #1 - $0; Spouse #2 - $26,860

D. Spouse #1 - $26,760; Spouse #2 - $100

E. None of the above