Corporate Liquidations and reorganizations

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QUESTION
Part 1. Corporate Liquidations and Reorganizations
 
When determining tax, a corporation that is no longer a going concern is treated as a corporate liquidation. A subsidiary liquidation is treated differently, since the parent company continues to be a going concern. Corporate reorganizations that continue to exist as going concerns may still create taxable gains in certain cases.
 
Consider the tax consequences related to corporate liquidations, subsidiary liquidations, and corporate reorganizations. How and why are they treated differently?
 
Write at least 200 words answering the following questions:
 

How would you explain the rationale for the different tax treatment of corporate liquidations, subsidiary liquidations, and corporate reorganizations?

 

Do the components of each (corporate liquidations, subsidiary liquidations, and corporate reorganizations) affect the respective tax treatment for each? Explain.

 

Is there an effect on the corporation making a distribution or a liquidation? Are distributions and liquidations treated differently according to tax law?

 

Describe when a corporation may decide how to treat taxable gains in corporate reorganizations and who benefits from the decision.

 
Part 2.  Corporate Tax Earnings and Profits
 
Assuming that XYZ Corporation is under the accrual basis of accounting, compute the earnings and profits according to the following accounting information. Record your calculations and results in a Word document or Excel spreadsheet.
 

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