Parent Corporation Owns 100% of the Single Class of Stock

question 4

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

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Definitions:

Unquestioning Obedience

A behavioral condition where an individual follows orders without protest or inquiry of its righteousness.

Holland Interest Areas

A categorization within career counseling that helps individuals understand their career interests based on six typological themes developed by John L. Holland.

Hexagon

A six-sided polygon that can have either equal or unequal sides and angles.

ASVAB CEP

The Armed Services Vocational Aptitude Battery Career Exploration Program, a comprehensive career exploration and planning program available to high school and post-secondary students.