Brown Corporation Purchased 85% of the Stock of Green Corporation

question 22

True/False

Brown Corporation purchased 85% of the stock of Green Corporation five years ago for $1.2 million.In the current year,Brown Corporation liquidates Green Corporation and acquires assets with a basis to Green Corporation of $800,000 (fair market value of $1.3 million).Brown Corporation will have a basis in the assets of $1.2 million,the same as Brown's basis in the Green stock.

---

Definitions:

Labor Organization

A group, often in the form of a union, that represents the collective interests of workers in negotiations with employers regarding wages, working conditions, and rights.

Mechanization

The process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.

Cotton Mills

Factories equipped for the processing and manufacturing of cotton into yarn or fabric, pivotal to the Industrial Revolution.

Labor Management

The process of managing the relationship between employers and their workforce, including aspects like hiring, training, and negotiating labor contracts.