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.

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Definitions:

Maturity Value

The total amount due to the owner of an investment at the end of its term, including principal and interest.

Notes Receivable

A claim against a debtor for an uncollected amount, typically evidenced by a formal instrument of credit.

Face Value

The nominal value printed on a bond, note, or other financial instrument, representing its value at maturity.

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.