Which of the Following Statements Is True Concerning the Disposition

question 50

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 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 the above.

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Definitions:

Assuming Similarity

Refers to the cognitive bias where one assumes others share the same beliefs and values.

Assuming Differences

The act of presuming that there are inherent distinctions between individuals or groups without evidence, often leading to stereotypes and misunderstandings.

Primacy Effect

Tendency to attend to the first pieces of information observed about another person in order to form an impression.

Halo Effect

Attributing a variety of positive qualities to those you like.