C owns 60 shares and D owns 40 shares of Z Corporation, representing all of the outstanding shares. C and D are otherwise unrelated individuals.

C owns 60 shares and D owns 40 shares of Z Corporation, representing all of the outstanding shares. C and D are otherwise unrelated individuals. C sells all of the Z stock to D for $600 in cash and $3,000 in notes payable over a 20 year period. Z pays off D's note as payments fall due.

a) Under these facts, C may transfer the obligation to Z without any additional tax implications

b) Under the Wall case, D would receive corporate distributions from Z. If E&P is present, there would be a dividend

c) Neither of the above