Parent Corporation and Subsidiary Corporation file consolidated returns on a calendar-year basis. In January 2014, Subsidiary sold land, which it had used in its business, to Parent for $50,000. Immediately before this sale, Subsidiary's basis for the land was $30,000. Parent held the land primarily for sale to customers in the ordinary course of business. In July 2015, Parent sold the land to Adams, an unrelated individual. In determining consolidated taxable income for 2015, how much should Subsidiary take into account as a result of the 2014 sale of the land from Subsidiary to Parent?
a. $0
b. $20,000
c. $30,000
d. $50,000
Answer: B
Tax
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- Income in respect of a cash-basis decedent
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