After a Plan of Complete Liquidation Has Been Adopted, Condor

Multiple Choice

After a plan of complete liquidation has been adopted, Condor Corporation sells its only asset, land (basis of $220,000) , to Eduardo (an unrelated party) for $300,000.Under the terms of the sale, Condor Corporation receives cash of $50,000 and Eduardo's notes for the balance of $250,000.The notes are payable over the next five years ($50,000 per year) and carry an appropriate interest rate.Immediately after the sale, Condor Corporation distributes the cash and notes to Maria, the sole shareholder of Condor Corporation.Maria has a basis of $30,000 in the Condor stock.The installment notes have a value equal to their face amount.If Maria wishes to defer as much gain as possible on the transaction, which of the following is correct?

A) Condor Corporation recognizes no gain or loss on the distribution of the installment notes.
B) Maria recognizes a gain of $20,000 in the year of liquidation.
C) Maria recognizes a gain of $45,000 in the year of liquidation.
D) Maria recognizes a gain of $270,000 in the year of liquidation.
E) None of the above.