Essay about Acc 565 Parent Tyrone Subsidiary Tax Research

3448 Words Apr 30th, 2011 14 Pages
INDEX TO TAX RESEARCH FILE

Item Page Reference
Determine the Facts 1
Locate the Applicable Authorities 1
Evaluate Authorities 1
Analyze the Facts in Terms of Applicable Authorities 2
Communicate Conclusions and Recommendations to Others 3
Memorandum-to-the-File 11
Client Letter 12

Determine the Facts
Parent Corporation has owned 60% of Subsidiary Corporation’s single class of stock for a number of years. Tyrone owns the remaining 40% of the Subsidiary stock. On August 10, of the current year, Parent purchases Tyrone’s Subsidiary stock for cash. On September 15, Subsidiary adopts a plan of liquidation. Subsidiary then makes a single liquidating distribution on October 1. The
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332. Complete liquidations of subsidiaries
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------------------------------------------------- (a) General rule
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No gain or loss shall be recognized on the receipt by a
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corporation of property distributed in complete liquidation of
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another corporation.
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(b) Liquidations to which section applies
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For purposes of this section, a distribution shall be considered
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to be in complete liquidation only if -
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(1) the corporation receiving such property was, on the date of
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the adoption of the plan of liquidation, and has continued to be
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at all times until the receipt of the property, the owner of
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stock (in such other corporation) meeting the
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