Which of the following statements is true concerning the disposition of an installment note?
A)Deferred gain is not recognized by the transferor if the installment note is a non-taxable transfer to a controlled corporation.
B)Deferred gain must only be recognized if the installment note was transferred as a gift to a related party.
C)Transfer of an installment obligation to another party will not trigger immediate recognition of deferred gain.
D)Deferred gain must be recognized if the note is transferred to the owner's estate at his death.
E)None of these.

Question

Quizplus · Accepted Answer

Deferred gain is not recognized by the transferor in a § 351 incorporation.It is merely shifted to the transferee corporation,which is responsible for the payment of tax on the subsequent collections of the installment note.

Which of the Following Statements Is True Concerning the Disposition