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No gain or loss is recognized by the liquidating corporation
on the distribution of property to the parent
Non-recognition only applies to property actually
distributed to the parent 9 Liquidations under § 332 and § 337 (Cont’d)
Tax consequences to recipient parent corporation (i.e.,
nonrecognition of gain/loss)—§ 332
Parent must meet the 80% stock ownership test of § 1504(a)(2)
Stock possessing at least 80% of all voting power, AND
At least 80% of total value of all stock
The 80% control test must be satisfied from the date of
adoption of the plan of liquidation until the final distribution Time of distribution
Complete cancellation or redemption of all of the sub’s stock within the
taxable year of the liquidating sub when the first distribution occurs
A series of distributions within three years resulting in the transfer of all
property Subsidiary must be solvent 10 Liquidations under § 332 and § 337 (Cont’d)
Basis of property received by the parent corporation—
Parents basis is a transferred basis (carryover of sub’s
Parent inherits all property attributes from the sub—
Parent’s basis in the sub stock dis...
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This note was uploaded on 04/04/2014 for the course ACCT 7375 taught by Professor Staff during the Fall '08 term at University of Houston.
- Fall '08