Code Sections-MC3-Liquidations

Question 1

331 (a)

Answer 1

gain or loss to shareholders in corporate liquidations

(a) liquidating distributions treated as taxable exchange for stock
(b) 301 not applicable

Question 2

332

Answer 2

complete liquidation of subsidiaries

Question 3

332(a)

Answer 3

complete liquidation of subsidiaries

(a) general rule- no gain or loss recognized by parent upon liquidation of a controlled subsidiary

Question 4

332(b)

Answer 4

complete liquidation of subsidiaries

(b) liquidations to which 332(a) applies
(1) controlled sub as defined in 1504
(2) complete liquidation within tax year or
(3) distribution is part of series to be completed within three years pursuant to a plan of liquidation

Question 5

334

Answer 5

basis of property received by shareholders in liquidations

Question 6

334(a)

Answer 6

basis of property received by shareholders in liquidations

(a)general rule-basis equals FMV of distributed property if received in a taxable liquidation

Question 7

334(b)

Answer 7

basis of property received by shareholders in liquidations

(b) liquidation of subsidiary-property retains a carryover basis if received in a non taxable liquidation

Question 8

336

Answer 8

tax treatment to liquidating corporation

Question 9

336(a)

Answer 9

tax treatment to liquidating corporation
(a) general rule-gain or loss IS recognized by the liquidating corporation as if property were sold to the shareholder at FMV

Question 10

336(b)

Answer 10

tax treatment to liquidating corporation

(b) treatment of liabilities

Question 11

336(c)

Answer 11

tax treatment to liquidating corporation

(c) exception for liquidations that are part of reorg

Question 12

336(d)

Answer 12

tax treatment to liquidating corporation

(d) limitation on loss recognition

Question 13

336(e)

Answer 13

tax treatment to liquidating corporation

(e) certain stock sales and distributions treated as asset transfers

Question 14

337

Answer 14

tax treatment to liquidating subsidiary

Question 15

337(a)

Answer 15

tax treatment to liquidating subsidiary

(a) general rule- no gain or loss is recognized by liquidating subsidiary in a 332 liquidation

Question 16

337(b)

Answer 16

tax treatment to liquidating subsidiary

(b) treatment of subsidiary debt

Question 17

338

Answer 17

certain stock purchases treated as asset acquisitions

Question 18

381

Answer 18

subsidiary’s tax attributes carry over to parent if 332 applies