In the liquidation of a subsidiary under § 332, gains and losses will be recognized on the distribution of property to minority shareholders.

Question

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In the liquidation of a subsidiary under § 332, gains and losses will not be recognized on the distribution of property to minority shareholders. This is because the subsidiary is being liquidated, and any gains or losses will be recognized by the parent company. The minority shareholders will receive their portion of the distribution based on their ownership percentage and will not recognize any gain or loss.

In the Liquidation of a Subsidiary Under § 332, Gains