Tax attributes of liquidating corporations

Subsidiary Liquidations Not Qualifying Under § 332 A. Application of § 267(f) to Transfers in Satisfaction of Debt 3. Some are clearly wrong, but we have made no attempt to correct them, as we have no way guess correctly in all cases, and do not wish to add to the confusion. (c) containing special rule for indebtedness of subsidiary to parent in relation to complete liquidations of subsidiaries. Do not assume that identically-titled documents are the same, or that a later document supersedes another with the same title. Release dates appear exactly as we get them from the IRS. The Portfolio also discusses the relationship between the liquidation rules and §338 (the election to treat a stock purchase as a purchase of assets). Finally, the Portfolio reviews the issues arising from the liquidation of insolvent subsidiaries and the existence of intercorporate debt in subsidiary liquidations.

Requirement of Distribution with Respect to Stock 2. Tax Consequences to Insolvent Subsidiary on Cancellation of Debt in Liquidation 4. Section 332 Does Not Protect Parent from Gain or Loss b. Consequences of Subsidiary's Ownership of Parent Debt if § 332 Does Not Apply a.

the corporation receiving such property was, on the date of the adoption of the plan of liquidation, and has continued to be at all times until the receipt of the property, the owner of stock (in such other corporation) meeting the requirements of section 1504(a)(2); and either the distribution is by such other corporation in complete cancellation or redemption of all its stock, and the transfer of all the property occurs within the taxable year; in such case the adoption by the shareholders of the resolution under which is authorized the distribution of all the assets of such corporation in complete cancellation or redemption of all its stock shall be considered an adoption of a plan of liquidation, even though no time for the completion of the transfer of the property is specified in such resolution; or such distribution is one of a series of distributions by such other corporation in complete cancellation or redemption of all its stock in accordance with a plan of liquidation under which the transfer of all the property under the liquidation is to be completed within 3 years from the close of the taxable year during which is made the first of the series of distributions under the plan, except that if such transfer is not completed within such period, or if the taxpayer does not continue qualified under paragraph (1) until the completion of such transfer, no distribution under the plan shall be considered a distribution in complete liquidation.

Tax attributes of liquidating corporations comments

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