What are the tax consequences of the liquidation to magenta

Reference no: EM13333785

The stock of Magenta Corporation is owned by Fuchsia Corporation (95%) and Marta (5%). Magenta is liquidated on September 2, 2009, pursuant to a plan of liquidation adopted earlier in the same year. In the liquidation, Magenta distributes various assets worth $2,375,000 (basis of $1.2 million) to Fuchsia (basis of $1.6 million in Magenta stock) and a parcel of land worth $125,000 (basis of $105,000) to Marta basis of $40,000) in Magenta stock). Assuming the Section 338 election is not made, what are the tax consequences of the liquidation to Magenta, Fuchsia, and Marta?

Reference no: EM13333785

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