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AB Corp is a Delaware corporation. AB Corp owns 100% of AB Sub. AB Sub has a property with a fair market value of $500

AB Corp is a Delaware corporation. AB Corp owns 100% of AB Sub. AB Sub has a property with a fair market value of $500 and basis of $350. AB Sub liquidates into AB Corp. At the time of the liquidation, AB Sub has earnings and profits of $100.

(a) What is the tax treatment to AB Corp?

(b) What is the tax treatment to AB Sub?

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