Senior Corp. completely liquidates its 80%-owned subsidiary, Junior Corp. The liquidation results in a distribution to Senior

Question:

Senior Corp. completely liquidates its 80%-owned subsidiary, Junior Corp. The liquidation results in a distribution to Senior of property with a fair market value of $1,000,000 and an adjusted basis to Junior of $400,000. How much gain will Senior and Junior each recognize on the transaction?
a. Senior, $0; Junior, $600,000
b. Senior, $0; Junior, $0
c. Senior, $600,000; Junior, $0
d. Senior, $0; Junior, $120,000

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....