A wholly owned subsidiary may hand over its assets tax free
What the document says“no gain or income resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and”
The section provides that where the assets of a trade or business relating to such an activity, held by a subsidiary wholly owned by one of the named entities, are transferred to that entity, including in liquidation of the subsidiary, within 18 months of enactment, no gain or income from the transfer is recognized to either, and all income the entity later derives from that transferred trade or business is exempt from tax.
What the document actually says“no gain or income resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and”
No gain or income from the handover is counted. That holds for the subsidiary and for the parent body.
The handover must happen within 18 months of this law. Winding up the subsidiary counts. Later income from that business is also tax free.
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