When a Shareholder Receives an Installment Note Attributable to a Sale

question 15

True/False

When a shareholder receives an installment note attributable to a sale of property by a liquidating corporation, receipt of the note is always treated as full payment for the stock for Federal income tax purposes.

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Definitions:

Basic Accounting Equation

An equation representing the relationship between assets, liabilities, and owner's equity: Assets = Liabilities + Owner's Equity.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, essentially representing the owner’s share of the company.

Consulting Revenues

Income generated by a firm through the provision of advisory or consultancy services.

Additional Investment

Extra funds invested into a business by its owners or shareholders over and above the initial or previous investments.