Ruby Corporation has announced plans to liquidate. Bronze Corporation owns 85% of Ruby’s stock. If Bronze wants to avoid the nontaxable treatment associated with a § 332 liquidation (e.g., nonrecognition of loss), it could reduce its stock ownership in Ruby to below 80%.
Answer the following statement true (T) or false (F)
True
Rationale: The 80% stock ownership threshold required under § 332 must be met as of the date that the subsidiary’s plan of liquidation is adopted and at all times until the subsidiary has been liquidated.
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Treasury stock refers to the shares of stock that have been reacquired by the issuing corporation
Indicate whether the statement is true or false