A company that buys back all of its stock is treated as liquidating. Nor is it possible in the West for two companies to own 100% of each other's shares (i.e.,

A company that buys back all of its stock is treated as liquidating. Nor is it possible in the West for two companies to own 100% of each other's shares (i.e., circular ownership). In most of the West, a subsidiary acquiring its parent's stock is treated as a redemption of those shares (i.e., as if those shares were returned to the parent), assuming the transaction is even allowed.