When a subsidiary is liquidated by its parent corporation, the basis of the assets transferred from the subsidiary to the parent is determined by the amount of the parent's investment in the subsidiary's stock.

Question

Quizplus · Accepted Answer

The basis of the assets transferred from the subsidiary to the parent in a liquidation is generally the subsidiary's basis in the assets, not the parent's investment in the subsidiary's stock.

When a Subsidiary Is Liquidated by Its Parent Corporation, the Basis