Section 332 does not apply to a parent-subsidiary liquidation if the subsidiary corporation is insolvent on the date of the liquidation.

Question

Quizplus · Accepted Answer

According to Section 332 of the Internal Revenue Code, the parent-subsidiary liquidation rules apply only if the subsidiary corporation is solvent on the date of liquidation. Therefore, if the subsidiary corporation is insolvent on the date of liquidation, Section 332 of the Internal Revenue Code does not apply.

Section 332 Does Not Apply to a Parent-Subsidiary Liquidation If