The subsidiary does not recognize gain on the distribution of any appreciated assets to the parent, which is an exception to the general rule of Section 311(b) that treats a corporate distribution of appreciated assets as a sale.
If a person receives a qualifying rollover distribution prior to his death, he may within 60 days under Section 402(a)(5) roll this over into an IRA and thereby defer payment of taxes on said distribution.
To qualify for the section 72(t)(2)(C) exception the distribution must be made by the plan administrator to an alternate payee in response to a qualified domestic relations order (QDRO).