Chapter 18, Problem 56P

a.

To determine

Provide information on the tax consequences if Mr. G borrowed $40,000 from the bank. Assume the loan was partially secured by the installment noes, but Mr. G was personally liable for the loan.

b.

To determine

Provide information on the tax consequence if Mr. G gave to his daughter the right to collect all future payments on installment obligations.

c.

To determine

Provide information on the tax consequence if Mr. G received the payment due on January 1, 2020. Assume that Mr. G died on December 15, 2020 and the remaining installment obligation was transferred to his estate and the amount was collected that was due on January 1, 2021.