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

---

Definitions:

Calibrating

Adjusting or setting a measuring device or instrument so its output accurately corresponds to the value of the measured quantity.

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, typically measured at the arteries.

Controlled Blood Pressure

Blood pressure that is maintained within a target range through lifestyle modifications and/or medication, reducing the risk of cardiovascular complications.

Brachial

Refers to the brachial artery in the arm; the artery used in measuring blood pressure.