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In each of the following cases, determine who is taxed on the income:
a. For $200, Lee purchases an old car that is badly in need of repair. He works on the car for 3 months and spends $300 on parts to restore it. Lee's son Jason needs $2,000 to pay his college tuition. Lee gives the car to Jason, who sells it for $2,000 and uses the money to pay his tuition.
b. Erica loans a friend $20,000. The terms of the loan require the payment of $2,000 in interest each year to Erica's daughter. At the end of 4 years, the $20,000 loan principal is to be repaid to Erica. Erica's daughter will use the $2,000 to pay her college tuition.
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