Question: When a parent corporation completely liquidates its 80%-owned subsidiary, the parent (as stockholder) will ordinarily a. Be subject to capital gains tax on 80% of

When a parent corporation completely liquidates its 80%-owned subsidiary, the parent (as stockholder) will ordinarily

a. Be subject to capital gains tax on 80% of the longterm gain.

b. Be subject to capital gains tax on 100% of the long-term gain.

c. Have to report any gain on liquidation as ordinary income.

d. Not recognize gain or loss on the liquidating distributions.

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