Hal sold land held as an investment with a fair-market value of $100,000 for $36,000 cash and a note for $64,000 that was due in 2 years. The note bore interest of 11% when the applicable federal rate was 7%. Hal's cost of the land was $40,000. Because of the buyer's good credit record and the high interest rate on the note, Hal thought the fair-market value of the note was at least $74,000.