PARENT CORP owns $100\%$ of SUBSIDIARY CORP, which has total E&P of $$1$ million! PARENT's basis in the SUB stock was $$500,000.$ Ut$-$oh$,$ the SUB CORP gets liquidated and everything gets paid up $$ distributed up to $$ the Parent!

SUB CORP has property $-$ land $-$ with a FMV of $$5$ million and basis of $$2$ million. SUB distributes the land $-$ as part of a Plan of Complete Liquidation $-$ to PARENT. What basis will PARENT CORP take in the land that it receives?

WHAT ABOUT THE COMPLETE LIQUIDATION OF A $$SUBSIDIARY$$ INTO THE $$PARENT$?"$

PARENT CORP owns $100\%$ of SUBSIDIARY CORP, which has total E&P of $$1$ million! PARENT's basis in the SUB stock was $$500,000.$ Ut$-$oh$,$ the SUB CORP gets liquidated and everything gets paid up $$ distributed up to $$ the Parent!

SUB CORP has property $-$ land $-$ with a FMV of $$5$ million and basis of $$2$ million. SUB distributes the land $-$ as part of a Plan of Complete Liquidation $-$ to PARENT. What basis will PARENT CORP take in the land that it receives?

$$5$ million

$$2$ million

$$1$ million

$$0$

$$500,000$