Parent Corporation Owns 100% of the Single Class of Stock

Multiple Choice

Parent Corporation owns 100% of the single class of stock of Subsidiary Corporation. Parent's basis in the Subsidiary stock is $500,000 when Parent completely liquidates Subsidiary Corporation within a single tax year. The Subsidiary Corporation assets have a $700,000 adjusted basis and an $800,000 FMV at liquidation. As a result of the liquidation, Parent must recognize a

A) $0 gain.
B) $200,000 gain.
C) $300,000 gain.
D) none of the above