Which of the Following Statements Is True Concerning the Disposition

question 66

Multiple Choice

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 be recognized only 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.

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Definitions:

Government Involvement

The extent to which the government participates in the economy, including regulation, ownership, and provision of public goods.

Market Inefficiency

This occurs when resources are not allocated optimally in a market, resulting in lost potential value.

Market Outcome

The result of all the buying and selling activities within a particular market, including price levels and quantities traded.

Equitable

Equitable refers to something characterized by fairness, impartiality, and justice, particularly in the way people are treated or decisions are made.