A Subsidiary Recognizes No Gain or Loss on a Distribution

question 9

True/False

A subsidiary recognizes no gain or loss on a distribution to a parent corporation owning the majority of the subsidiary's stock in a complete liquidation.

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Definitions:

Certificate of Exchange

A document that certifies a completed exchange, often referring to the exchange of stock certificates in mergers and acquisitions.

Shares Exchange

The process or act of trading shares of stock, typically through a formal exchange, where securities are bought and sold by investors.

Plan for Merger

A detailed strategy outlining the method and steps by which two or more companies will legally consolidate into one entity.

Shareholder Notice

A communication sent to the shareholders of a company informing them of important issues or events.