Par corp. acquired the assets of its wholly owned subsidiary, sub corp., under a plan that qualified as a tax-free complete liquidation of sub. which of the following of sub’s unused carryovers may be transferred to par? a. excess charitable contributions
b. net operating loss
c. both excess charitable contributions and net operating loss
d. neither excess charitable contributions nor net operating loss

C) Both excess charitable contributions and net operating loss

Explanation:

A parent company that liquidates a subsidiary cannot recognize any type of gain or loss from the process since their balance should have been consolidated already.

Any property that the parent company gets from the subsidiary should have the same cost basis and all the carryovers that the subsidiary had should pass to the parent company, including net operating loss carryover, business credit carryover, capital loss carryover, charitable contributions carryover, and earnings and profits carryover.