indigo has a basis of $1 million in the stock of owl corp, a subsidiary o which it owns 100% of all classes of stock. indigo purchased the stock 10 years ago. in the current year indigo liquidates owl and aquires assets worth $ 1.2 million. At the time of its liquidation, owl corp had a basis of $ 800,000 in the assets and E & P $ 500,000. Which of the following statement is correct with respect to the liquidation

a) owl recognizes a gain of $ 400,000

b) indigo has a $ 800,000 basis in the assets

c) owls E & P of $ 500,000 is eliminated

d) indigo recognizes a gain of $ 200,000

e) none of the above