Identify which of the following statements is false.
A)Minority shareholders involved in a Sec. 332 subsidiary liquidation must recognize a gain or loss under the Sec. 331 general liquidation rules.
B)The parent corporation takes a basis in property received when liquidating a subsidiary corporation in a Sec. 332 liquidation equal to its basis to the subsidiary corporation.
C)Section 332 is applicable to both the parent corporation and the minority shareholders if they exist.
D)Property received by a minority shareholder takes a basis equal to its fair market value.

Question

Quizplus · Accepted Answer

Section 332 applies only to the parent corporation in a subsidiary liquidation, not to minority shareholders. Minority shareholders are subject to the general liquidation rules under Section 331, not Section 332.

Identify Which of the Following Statements Is False