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Daisy Corporation is the sole shareholder of Ostrich Corporation, which it hopes to sell within the next threeyears. The Ostrich stock (basis of $25 million) is currently worth $30 million, but Daisy believes that it wouldbe easier to find a buyer if it was worth less. To lower the value of its stock, Ostrich distributes $4 millioncash to Daisy (sufficient E & P exists to cover the distribution). At a later date, Daisy sells Ostrich for $26million.a. What are the tax consequences to Daisy on the sale?
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