C Corporation #1 owns 90% of C Corporation #2. The other 10% of C Corporation #2 is owned by Bob, an individual shareholder unrealated to any of the other shareholders in either C Corporation #1 or C Corporation #2.

In 2001, C Corporation #1 created C Corporation #2 by transferring $20,000,000 to it in exchange for 100% of its stock. C Corporation #2 took the $20,000,000 it received from C Corporation #1 and bought a large piece of land in Florida and places it in service as a Section 1231 asset.

In 2010, C Corporation #1 sold 10% of the C Corporation #2 stock that it owned to Bob for 8,000,001

In the current year, C Corporation #2 was approached by a developer who wanted to buy its land for $50,000,001 cash. C Corporation #2 has decided to undergo a complete liquidation as part of this transaction.

Assuming a 21% corporate income tax rate, what will be the tax consequences, if any, of the liquidation of C Corporation #2?

How will the liquidation of C Corporation #2 affect C Corporation #1?

How will the liquidation of C Corporation #2 affect Bob?

Should an IRC Section 338 election be made? Yes/no

Referring to #4 above, why or why not? (2-4 sentences)