Question
At the beginning of the tax year, Parent has a stock basis in Subsidiary equal to $800,000. Parent and Subsidiary file a consolidated tax return.
At the beginning of the tax year, Parent has a stock basis in Subsidiary equal to $800,000. Parent and Subsidiary file a consolidated tax return. During the year, Subsidiary has earnings and profits of $2,000,000 and makes a distribution to its parent corporation of $3,000,000. At the end of the year Parents tax basis in subsidiary is:
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
11th Canadian edition Volume 2
1119048540, 978-1119048541
