Match each of the following items with the appropriate description, indicating whether the item increases or decreases the parent's basis in the stock of a subsidiary.
-Member's operating loss.
A)Increases stock basis of subsidiary
B)Decreases stock basis of subsidiary
C)No effect on stock basis of subsidiary

Question

Quizplus · Accepted Answer

A member's operating loss decreases the parent's basis in the stock of a subsidiary because the loss reflects a reduction in the value of the subsidiary, which is then reflected in the parent's investment value.

Match Each of the Following Items with the Appropriate Description