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.
-Increase in affiliate's E & P.
A)Increases stock basis of subsidiary
B)Decreases stock basis of subsidiary
C)No effect on stock basis of subsidiary

Question

Quizplus · Accepted Answer

An increase in a subsidiary's Earnings and Profits (E & P) does not directly affect the parent's basis in the stock of the subsidiary.

Match Each of the Following Items with the Appropriate Description