Unformatted text preview: be retained by the subsidiary in order to protect its legal existence and preserve its corporate charter. There is a certain time period required for the liquidating distributions to occur. If all liquidating distributions are made within one taxable year of the subsidiary, no formal plan of liquidation needs to be used. However, if the liquidating distributions extend beyond one taxable year, a formal plan of liquidation must be adopted and all liquidating distributions must be made within three taxable years of the close of the taxable year in which the first distribution is made. If the liquidation is not achieved within the specified period of time the liquidation will not be accepted under code Sec 332....
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This note was uploaded on 03/05/2012 for the course INCOME TAX 4404 taught by Professor Bulie during the Spring '11 term at University of Minnesota Duluth.
- Spring '11