USM sells products it manufactures in the United States to unrelated foreign and U.S. customers who agree in a written installment debt obligation to pay the purchase price in installments over a period of five years. USM sells the installment obligations to Matterhorn for less than the unpaid principal balance on the obligations. Matterhorn either collects the obligations at maturity at face value or sells them to an unrelated party for more than it paid USM for them but less than their face value.

What are the tax consequences of these transactions under Sections 864(d), 951(a)(1)(A), and 954(c)?