Check-and-Sell Transaction
{"Image DocumentName": "Check-and-Sell Transaction", "Image ImageDescription": "P. Bus. 2. CFC1. X. Deemed Liquidation. Bus. 1. CFC2. Bus. 2. Facts: P owns 100% of CFC1, which engages in business 1. CFC1 owns 100% of CFC2, which engages in business 2. CFC1 and CFC2 are controlled foreign corporations incorporated in the United Kingdom. On Date 1, P causes CFC1 to check-the-box for CFC2, which results in a deemed section 332 liquidation of CFC2. Immediately thereafter, P causes CFC1 sells all of the assets of business 2 (i.e., CFC2 assets) to X for cash. Issue: Under the rationale of Dover Corp. v. Commissioner, 122 T.C. 324 (2004), the income generated from the sale does not constitute Subpart F income. Was there a business purpose or profit potential from checking the box?", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}