BH, which is publicly-traded, is a conglomerate. It wants to distribute one of its divisions, called Geico, to its shareholders. BH distributes Geico stock pro rata to its shareholders. BH Corporation had a net operating loss (NOL) of $10m at the time of the distribution.

1. What are the federal income tax results of this distribution? Would your answer change if BH had purchased Geico just two years ago?
2. What result if, six months after the distribution, Allstate Corp. acquires 100% of the stock of Geico for $200m?
3. Would your answer to a. change if, 80% of Geico's assets constituted U.S. government bonds and cash?