When a subsidiary sells to the parent some business-use property that has appreciated from its $20,000 basis to a $50,000 fair market value,the subsidiary immediately recognizes $30,000 ordinary income.

Question

Quizplus · Accepted Answer

The gain is deferred until the property leaves the group by sale or other exchange.The amount of the gain for purposes of the eliminating entry is $30,000.

When a Subsidiary Sells to the Parent Some Business-Use Property