Parent Corp. owns 100% of the stock of Subsidiary Corp. Parent's basis for the Subsidiary Corp. stock is $225,000. Pursuant to a plan of complete liquidation, Subsidiary distributes to Parent assets with a fair market value of $800,000 and an adjusted basis of $300,000, along with liabilities of $100,000. At the time of liquidation, Subsidiary has accumulated earnings and profits of $600,000.
How much gain is recognized by Subsidiary Corp. on the liquidating distribution to Parent Corp.?
How much gain is recognized by Parent as a result of the liquidation?
What tax basis does Parent Corp. have for the assets it receives from Subsidiary Corp.?
What happens to Parent's $225,000 basis for its Subsidiary stock?
What happens to Subsidiary's $600,000 of accumulated earnings and profits?