Client, a cash method taxpayer owns a rental building that client acquired four years ago and depreciated using the straight-line method. It currently has an adjusted basis of $200, 000 and a value of $500, 000. Buyer purchases the building giving Client five $100,000 5% interest bearing notes, one to be paid in each of the five succeeding years (years two through six). In the year of sale (year one), Client borrows $200,000 pledging the $500,000 of buyers notes as security

What tax consequences to client in the current year and each of the succeeding five years?