• Ms. A is taxed in the top bracket and she owns a bond worth $50,000. The original cost to Ms. A was $50,000. The bond produces $5,000 of interest income.
• Junior is Ms. A’s son. He is 15 years old and he has no income.
• Ms. A gives the property to Junior.

REQUIRED
(1) What are the tax consequences to Ms. A and Junior?
(2) What are the tax consequences to Ms. A and Junior if Ms. A sells the property to Junior and takes back a loan?