TAX 9866 Lecture 18: Section 337
Document Summary
Section 337: provides that liquidating subsidiary does not recognize g/l on distr of property to its parent in complete liquidation to which 332 applies. Tp required to maintain contemporaneous documentation (do it in conjunction w/ pricing; don"t go back and make up file) Tp is important because you can manipulate ultimate tax liability (beps) Base penalty = 20% but could go up to 40: not an includible corporation (for affiliated group purposes) Certain others disc/963: computation of consolidated ti, first calculate ti for each member as if it were a separate company, adjust for your consolidated items and combine results, consolidated adjustment items. Intercompany g/l (if gain, deferred till depr deduction; if loss, taken once sold to tp: recompute consolidated ti and apply tax rate, ela recapture. Y10: break even [but you"re at the end of 5th. 11,000 year and didn"t use capital loss increase to. If you sell this you will have to recapture the excess loss account.
