If a Parent Corporation Makes a § 338 Election, the Subsidiary

question 1

True/False

If a parent corporation makes a § 338 election, the subsidiary corporation recognizes gain but not loss on the deemed sale of its assets on the qualified stock purchase date.

---

Definitions:

Limited Liability Company

A corporate framework that merges the direct taxation benefit of partnerships or sole proprietorships with the corporation's advantage of limited liability.

Corporation

A legal entity that is separate from its owners, offering limited liability to its shareholders, and is able to own assets, incur liabilities, and enter into contracts.

Securities And Exchange Commission

A federal agency responsible for enforcing US federal securities laws and regulating the securities industry, stock and options exchanges.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction.