Parent Corporation has owned all 160 shares of Subsidiary Corporation common stock since 2013. Parent has been in the business of manufacturing and selling light fixtures, and Subsidiary has been in the business of manufacturing and selling light bulbs. Beth and Robert are the two equal shareholders of the Parent stock and have owned their stock since 2013. Beth's basis in her 80 Parent shares is $420,000, and Robert's basis in his 80 Parent shares also is $420,000. On April 10, 2020, Parent distributes all 160 Subsidiary shares to Robert in exchange for all his Parent shares (which are cancelled). The distribution has a bona fide business purpose. The Subsidiary stock had a $10,000 basis to Parent on the distribution date. At the end of 2020, Parent has $130,000 of E&P. Immediately after the distribution, the FMVs of the Parent and Subsidiary stocks are $4,500 and $3,000 per share, respectively. Read the requirements Requirement a. What are the amount and character of the gain, loss, or income Robert must recognize as a result of Parent's distributing the Subsidiary stock? (Use parentheses or a minus sign for a loss. Complete all input fields. Enter "0" if no gain or loss is recognized, then select "N/A" as character.) Character Gain/(loss) Requirements a. What are the amount and character of the gain, loss, or income Robert must recognize as a result of Parent's distributing the Subsidiary stock? b. What basis does Robert take in the Subsidiary stock? c. When does Robert's holding period for the Subsidiary stock begin? d. Assume instead that Richard formed Subsidiary in 2016 to manufacture and sell lightbulbs. Richard sold the Subsidiary stock to Parent for cash in 2018. How would your answers to Parts a-c change? Print Done Parent Corporation has owned all 160 shares of Subsidiary Corporation common stock since 2013. Parent has been in the business of manufacturing and selling light fixtures, and Subsidiary has been in the business of manufacturing and selling light bulbs. Beth and Robert are the two equal shareholders of the Parent stock and have owned their stock since 2013. Beth's basis in her 80 Parent shares is $420,000, and Robert's basis in his 80 Parent shares also is $420,000. On April 10, 2020, Parent distributes all 160 Subsidiary shares to Robert in exchange for all his Parent shares (which are cancelled). The distribution has a bona fide business purpose. The Subsidiary stock had a $10,000 basis to Parent on the distribution date. At the end of 2020, Parent has $130,000 of E&P. Immediately after the distribution, the FMVs of the Parent and Subsidiary stocks are $4,500 and $3,000 per share, respectively. Read the requirements Requirement a. What are the amount and character of the gain, loss, or income Robert must recognize as a result of Parent's distributing the Subsidiary stock? (Use parentheses or a minus sign for a loss. Complete all input fields. Enter "0" if no gain or loss is recognized, then select "N/A" as character.) Character Gain/(loss) Requirements a. What are the amount and character of the gain, loss, or income Robert must recognize as a result of Parent's distributing the Subsidiary stock? b. What basis does Robert take in the Subsidiary stock? c. When does Robert's holding period for the Subsidiary stock begin? d. Assume instead that Richard formed Subsidiary in 2016 to manufacture and sell lightbulbs. Richard sold the Subsidiary stock to Parent for cash in 2018. How would your answers to Parts a-c change? Print Done