# Prop. Treas. Reg. § 1.453B-1: Gain or loss on disposition of installment obligations.

Proposed regulation, not in force. REG-109187-11, 79 FR 76928, published 2014-12-23 <https://www.federalregister.gov/documents/2014/12/23/2014-30103/nonrecognition-of-gain-or-loss-on-certain-dispositions-of-installment-obligations>. Interprets 26 U.S.C. § 453B.

Par. 4. Section 1.453B-1 is added to read as follows:

(a) General rule. [Reserved].

(b) Basis of obligation. [Reserved].

(c) Dispositions on which no gain or loss is recognized.

(1) Certain nonrecognition transactions —(i) In general. If the Internal Revenue Code provides an exception to the recognition of gain or loss for certain dispositions, no gain or loss shall be recognized under section 453B on the disposition of an installment obligation within that exception. These exceptions include—

(A) Certain transfers to corporations under sections 351 and 361;

(B) Contributions to a partnership under section 721; and

(C) Distributions by a partnership to a partner under section 731 (except as provided by sections 704(c)(1)(B), 736, 737, and 751(b)).

(ii) Transactions resulting in a satisfaction of installment obligations. Paragraph (c)(1)(i) of this section does not apply to a disposition that results in a satisfaction of an installment obligation, regardless of whether the disposition occurs as part of a transaction for which the Internal Revenue Code provides an exception to the recognition of gain or loss. These dispositions include, but are not limited to—

(A) The receipt of stock of a corporation from the corporation in satisfaction of an installment obligation of the corporation; and

(B) The receipt of an interest in a partnership from the partnership in satisfaction of an installment obligation of the partnership.

(2) Effective/applicability date. This paragraph (c) applies to satisfactions, distributions, transmissions, sales, or other dispositions of installment obligations after the date these regulations are published as final regulations in the Federal Register .