Last year, Julie Poppins sold to her daughter, Mary, a day care business for $180,000, which was its fair market value. Julie's basis in the business was $90,000. Mary gave Julie an unsecured promissory note in which she promised to pay the purchase price in 15 annual installments composed of only interest at the prevailing rate for the first five years, with each of the remaining 10 annual payments to be composed of $18,000 principal plus interest at the same rate. At Mary's request, the note also contained a provision that if Julie died while any part of the note was not yet due, the payments not yet due would be canceled. Which of the following statements correctly describe the tax implications of the intra-family sale that Julie has made to Mary?

I. If Julie dies while any part of the note remains outstanding, her gross estate must include the fair market value of the day care business.
II. If any annual installments under the terms of the note are canceled, the present value of the canceled installments will be included in Julie's gross estate.
III. Cancellation of any annual installments by Julie's estate under the terms of the note will cause her estate to realize a taxable gain on the forgiven installments.
IV. If Mary closes the day care business before Julie dies, and Julie cancels the entire note, Julie will be subject to both income taxes and gift taxes.