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What basis will ABC Corporation have in the assets

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Problem - ABC Corporation, the parent corporation, has a basis of $500,000 in the stock of CDE Corporation, a subsidiary in which it owns 75% of all classes of stock. ABC purchased the stock in CDE Corporation 10 years ago. In the current year, ABC Corporation liquidates CDE Corporation and acquires assets worth $700,000 and with a tax basis to CDE Corporation of $900,000. Assume that the subsidiary is solvent, what basis will ABC Corporation have in the assets acquired from CDE Corporation?

Reference no: EM132949641

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