Company ABC owns $100\%$ of Company DEF. Company ABC sells sneakers to wholesalers and retail stores. Company DEF manufactures sneaker boxes. Jeff is the only shareholder of Company ABC. During $2020,$ Company ABC decides to liquidation Company DEF. Please discuss the tax implications of this liquidation.

Jeff comes to you in January of $2021$ and asks you for advice on closing the Company ABC. He said he has been selling assets, but found a buyer that wanted all of Company ABC's asset and he would liquidate Company ABC. Please example to Jeff the ramifications of selling all Company ABC's assets to the third party and liquidating Company ABC.

Please calculate the tax impact to Jeff if he were to liquidate Company ABC. If more information is needed please explain why.

Jeff's adjusted basis in Company ABC $-$ $$1$m

Company ABC's assets FMV $-$$$40$m

Company ABC's cash on hand $-$ $$20$m