George sold land to an unrelated party in 2013. His basis in the land was $45,000 And the selling price was $120,000 - $30,000 payable at closing and $30,000 (plus 10% interest) due January 1, 2014, 2015, and 2016. What would be the tax consequences of the following?
(Treat each part independently and assume that (1) George did not elect out of the installment method and (2) the installment obligations have values equal to their face amounts. Ignore interest in you calculations.)
a. In 2014, George borrowed $40,000 from the bank. The loan was partially secured by the installment notes, but George was personally liable for the loan.
b. In 2014, George gave to his daughter the right to collect all future payments on the installment obligations.
c. On December 2014, George received the payment due on January 1, 2015. On December 15, 2015, George died, and the remaining installment obligation was transferred to his estate. The estate collected the amount due on January 1, 2016.