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CorpTax-Slides for Chapter 5.Fall13

Property to the parent non recognition only applies

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Unformatted text preview: 37 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— § 334(b)(1) Parents basis is a transferred basis (carryover of sub’s basis) Parent inherits all property attributes from the sub— § 381 Parent’s basis in the sub stock dis...
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