Parent , Inc owns 95 % % of Sub Inc . Parent's basis in Sub stock is $ 900,000 . Eva owns 5 % of Sub stock . Her basis in Sub stock is $40,000 . In a liquidating distribution , Parent receives cash of $500,000 and a capital asset with a fair market value $450,000 .Sub's basis in the capital asset is $250,000. Eva receives a capital asset with a fair market value of $50,000 and a tax basis of $20,000. What gain or loss do Parent and Eva recognize as a result of the liquidating distributions ? Parent recognizes $50,000 capital gain , Eva recognizes $10,000 capital gain B. Parent recognizes $50,000 capital gain , Eva recognizes no gain or loss C. Neither Parent nor Eva recognize any gain or loss D. Parent recognizes no gain or loss , Eva recognizes $10,000 capital gain
Parent , Inc owns 95 % % of Sub Inc . Parent's basis in Sub stock is $ 900,000 . Eva owns 5 % of Sub stock . Her basis in Sub stock is $40,000 . In a liquidating distribution , Parent receives cash of $500,000 and a capital asset with a fair market value $450,000 .Sub's basis in the capital asset is $250,000. Eva receives a capital asset with a fair market value of $50,000 and a tax basis of $20,000. What gain or loss do Parent and Eva recognize as a result of the liquidating distributions ?
Parent recognizes $50,000
B.
Parent recognizes $50,000 capital gain , Eva recognizes no gain or loss
C.
Neither Parent nor Eva recognize any gain or loss
D.
Parent recognizes no gain or loss , Eva recognizes $10,000 capital gain
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