In 2011, P Purchases and Places into Service a Machine

In 2011, P purchases and places into service a machine that qualifies for the business tax credit.In 2012, P sells the machine to its wholly owned subsidiary, S.In 2013, S is separated from the group and files a separate tax return for the year.From these facts, choose the correct response below.

A) The sale from P to S constitutes a disposition in 2012.
B) If S sells the machine in 2013, P is responsible for the investment tax credit recapture.
C) If S sells the machine in 2013, S is responsible for the investment tax credit recapture.
D) If S sells the machine in 2013, P or S will have to recapture the investment tax credit in accordance with the tax-sharing agreement in effect at the time of the intercompany sale.
E) None of the responses are correct.