Sarah owns a business worth $5 million. Her adjusted basis is $450,000. She is 60 years old and wants to sell the business to her son, Todd, but also wants to reduce her gross estate. She sells him the business in exchange for a private annuity. Sarah’s life expectancy is 27 years and the §7520 rate is 2.6%. Sarah dies after Todd makes his 5th payment. Todd sells the business for $7.5 million. What is Todd’s gain on the sale of the business?

• $1,685,190
• $2,500,000
• $4,550,000
• $6,199,845