WhaleCo aquired all of the common stock of MinnowCo early in Year 1, for $500,000 and MinnowCo immediately elected to join WhaleCo's consolidated federal income tax return. As part of the takeover, WhaleCo also acquired $800,000 of MinnowCo bonds. The results of MinnowCo for the first few years of the group operations were reported as follows.
Tax Year Operating Gain/(Loss) Stock basis
1 $100,000
2 (400,000)
3 (300,000)
WhaleCo has determined that it will sell all of its MinnowCo stock at the end of the year 3 for $250,000. Taking into account the rules regarding excess loss accounts, determine WhaleCo's gain/loss from its sale of the MinnowCo stock.