Gold Corporation sold its 40% of the Ruby Corporation common stock.Gold received $8 million in the year of the sale and a note for $12 million, payable in three years with interest at the Federal rate.Gold's basis in the stock was $2 million.Assume that Gold Corporation will report the gain by the installment method where the method is permitted.
A)If the Ruby Corporation stock is traded on a national exchange, Gold must recognize $18 million gain in the year of sale.
B)If the Ruby Corporation stock is not traded on an established market, Gold must recognize a $7,200,000 gain in the year of sale.
C)If the Ruby Corporation stock is not traded on a national exchange, Gold must pay interest on a portion of the deferred taxes.
D)All of the above are true.
E)None of the above is true.

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The Answer of Gold Corporation sold its 40% of the Ruby Corporation common stock.Gold received $8 million in the year of the sale and a note for $12 million, payable in three years with interest at the Federal rate.Gold's basis in the stock was $2 million.Assume that Gold Corporation will report the gain by the installment method where the method is permitted.
A)If the Ruby Corporation stock is traded on a national exchange, Gold must recognize $18 million gain in the year of sale.
B)If the Ruby Corporation stock is not traded on an established market, Gold must recognize a $7,200,000 gain in the year of sale.
C)If the Ruby Corporation stock is not traded on a national exchange, Gold must pay interest on a portion of the deferred taxes.
D)All of the above are true.
E)None of the above is true.

Gold Corporation Sold Its 40% of the Ruby Corporation Common