In 2011,Kathy Sold an Apartment Building to Her 100 Percent

In 2011,Kathy sold an apartment building to her 100 percent controlled corporation,Kathy,Inc.The apartment building cost $500,000 and the balance in the accumulated depreciation account was $400,000.Kathy,Inc.paid $100,000 in the year of sale and gave Kathy a note for $900,000 plus adequate interest due in 2013.

A) Kathy can use the installment method only if tax avoidance was not a principal purpose of the transaction.
B) Kathy generally cannot report the gain by the installment method.
C) If Kathy owned only 40 percent rather than 100 percent of the corporation, she could use the installment method.
D) Only a. and b. are correct.
E) a., b., and c. are correct.