A dissipative bistable system presents the simplest model to describe condensed phase reaction dynamics. Using a quantum master equation approach to calculate multitime dipole correlation functions we demonstrate how the dissipative dynamics can be characterized by time-resolved third-order infrared spectroscopy. Thereby we incorporate bilinear and linear-quadratic system-bath interaction into the Redfield relaxation tensor. Investigating equilibrium and nonequilibrium initial conditions for a symmetric system it is shown that bath-induced coherence transfer can have a dramatic influence on the two-dimensional signals. This occurs when the inverse of the ground state tunneling splitting is of the order of the coherence transfer time. (C) 2003 American Institute of Physics.