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:

Batch Process

A method of manufacturing where production occurs in groups or batches, with each batch moving through the production process together.

Operation Performed

Refers to an action executed within a system, application, or process, typically resulting in a change or outcome.

Distributive Control

Distributive control is a system architecture where control functions are distributed among multiple interconnected elements, rather than being centrally located, to enhance reliability and flexibility.

On/Off Control

A basic form of control where a device or system is either fully activated (on) or completely deactivated (off), without intermediate states.