Under what circumstances is the distribution of a controlled corporation's stock or securities nontaxable to the distributing corporation's shareholders? (Select all that apply.)

A.

Immediately after the distribution, the distributing corporation and the controlled corporation both must be engaged in the active conduct of a trade or business that also was actively conducted for at least five years prior to the distribution.

B.

The persons who directly or indirectly owned the controlled corporation(s) prior to its division must maintain a continuing equity interest in one or more of the corporations following the division.

C.

The property distributed must consist solely of stock or securities of a corporation controlled by the distributing corporation immediately before the distribution.

D.

The distributing corporation must distribute either (a) all the stock and securities in the controlled corporation held by it immediately before the distribution or (b) an amount of stock in the controlled corporation constituting control (generally 80% stock ownership).

E.

The distribution must not have been used principally as a device to distribute the E&P of the distributing corporation, the controlled corporation, or both.

F.

The property distributed must consist solely of cash and other liquid assets of a corporation controlled by the distributing corporation immediately before the distribution.

G.

Immediately after the distribution, the distributing corporation and the controlled corporation both must not be engaged in the active conduct of a trade or business that also was actively conducted for at least five years prior to the distribution.

H.

The distribution must have a substantial business purpose.