For his 18th birthday, Kevin gave his son, Gabe, 5 gold coins for which he paid $500 each 2 years earlier. On Gabe’s birthday, coins were selling for $450. One month after his birthday, Gabe sells 2 of the coins for $525 each and uses the money to buy a motorcycle.
Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.