Both the corporation and its shareholders may defer gain,to the point of collection,on a liquidating distribution of installment notes obtained by the corporation in the sale of its assets.

Question

Quizplus · Accepted Answer

The shareholders may defer gain on the receipt of the notes.However,the corporation will recognize gain (or loss)on the distribution of the notes equal to the difference between the fair market value of the notes and the corporation's basis in the notes.

Both the Corporation and Its Shareholders May Defer Gain,to the Point