Walter sold land (a capital asset) to an unrelated party for $100,000 cash and a 4% note for $150,000 due in three years. His basis in the land was $40,000. Walter and the purchaser are cash basis taxpayers. Which of the following statements is correct?
A) If the Federal rate is 3%, interest will be imputed at that rate.
B) If the Federal rate is 5%, interest will be imputed at that rate and the capital gain will be reduced.
C) If the Federal rate is 4.5%, interest will be imputed at that rate and the capital gain will be increased.
D) All of the above.
E) None of the above.

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The Answer of Walter sold land (a capital asset) to an unrelated party for $100,000 cash and a 4% note for $150,000 due in three years. His basis in the land was $40,000. Walter and the purchaser are cash basis taxpayers. Which of the following statements is correct?
A) If the Federal rate is 3%, interest will be imputed at that rate.
B) If the Federal rate is 5%, interest will be imputed at that rate and the capital gain will be reduced.
C) If the Federal rate is 4.5%, interest will be imputed at that rate and the capital gain will be increased.
D) All of the above.
E) None of the above.

Walter Sold Land (A Capital Asset) to an Unrelated Party