Unformatted text preview: receivable (I/R), then distributes the I/R (note) to the shareholder) SALE: Gain/loss realized = Parent recognizes NO gain OR loss S/H’s AB in Property Rec’d FMV Carryover basis Effect on Distributing Corp’s Taxable Income Gains AND losses recognized EXCEPTION: Related-party losses disallowed per Sec. 336(d)(1); tax-avoidance losses limited per Sec. 336(d) (2) NO gain OR loss recognized Effect on Distributing Corp’s E&P and Tax Attributes E&P eliminated; other tax attributes disappear No E&P effect since carryover basis AND parent inherits subsidiary’s attributes...
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- Spring '12
- Balance Sheet, Corporation, Taxation in the United States, carryover basis