Section 35-3-08-01-104 - Liquidation of a Subsidiary Into a Parent:1. Section 27-7-9(j)1provides that no gain shall be recognized if a subsidiary liquidates into a parent and the parent carries the assets at the same bases as were carried on the books of the subsidiary. The non-recognition of gain in this section refers to any gain on distribution by the subsidiary. Therefore, there would be no gain by the subsidiary.2. Section 27-7-9(l)requires shareholders to recognize gain on the redemption of stock including partial and complete liquidations, subject to subsection j(1). The parent is required to record the assets of a subsection j(1) liquidation at the same basis that the subsidiary had prior to liquidation. Subsection j(1) would defer any gain on the difference between the fair market value of the assets and the basis which the parent used to record the assets on its books (carryover basis). Any gain on the difference between the basis of the stock of the subsidiary and the basis of the assets from the subsidiary would be recognized and reported by the parent.3. If the basis in the stock exceeds the basis in assets, a loss may not be recognized, but the basis in the assets may be increased to equal the basis in the stock.4. Under no circumstances is a gain on a liquidation, transfer of assets, distribution of assets or a reorganization forgiven.35 Miss. Code. R. § 3-08-01-104