Question 1
How does the treatment of a liquidation of a subsidiary into its parent corporation differ from the general rule?
Question 2
Pursuant to a complete liquidation, Southern Electric Corporation distributes the following assets to its shareholders:
Inventory: $15,000 basis, $20,000 FMV
Land held as an investment: $10,000 basis, $40,000 FMV
Marketable securities: $35,000 basis; $30,000 FMV
What are the tax consequences to Southern Electric Corporation?