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Is there anything I'm missing here?

I think you're concentrating on the determining of tax liability, but your question implies to me you're talking about collection of the parent's liability from the sub's assets. If you are, all of the sub's assets are indirectly available to the IRS for the parent's liabilities, through the sub's stock. I would assume it's the same for any of the parent's creditors who get as far as a judgment or have a security interest in the sub's stock.

It usually doesn't work the other way around. IOW, the parent's assets aren't available for payment of the sub's debts.

Phil Marti
Retired IRS Collection Officer
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