Parent Corporation Owns 100% of the Single Class of Stock

question 22

Multiple Choice

Parent Corporation owns 100% of the single class of stock of Subsidiary Corporation. Parent's basis in the Subsidiary stock is $500,000 when Parent completely liquidates Subsidiary Corporation within a single tax year. The Subsidiary Corporation assets have a $700,000 adjusted basis and an $800,000 FMV at liquidation. As a result of the liquidation, Parent must recognize a

• A)$0 gain.
• B)$200,000 gain.
• C)$300,000 gain.
• D)none of the above

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Definitions:

Introspection

The examination or observation of one's own mental and emotional processes.

Interpersonal Conflicts

Disagreements or disputes between individuals resulting from differing views, goals, or values.

Freedom

The power or right to act, speak, or think as one wants without hindrance or restraint.

Traditionals

Refers to the beliefs, customs, practices, and behaviors that are passed down through generations.