When a parent corporation completely liquidates its 80% owned subsidiary, the parent (as stockholder) will ordinarily
a. Be subject to capital gains tax on 80% of the long-term gain.
b. Be subject to capital gains ax on 100% of the long-term gain.
c. Have to report any gain on liquidation as ordinary income.
d. Not recognize gain or loss on the liquidating distributions.
Answer: D
Tax
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