Result
(B) Result(1) Because F1 owns all of the stock of F2, F2 is a look-through subsidiary of F1 within the meaning of 1.12972(g)(3). Under section 1297(c) and 1.12972(b)(2), F1 is treated as if it held 100% of the assets of F2 and received directly 100% of the income of F2. Under paragraph (d)(1) of this section, because F1 is engaged in the active conduct of an insurance business and the stock of F2 is an asset that is available to satisfy the insurance liabilities of F1, F1 treats its proportionate share of the income and assets of F2 as non-passive. The amount of income and assets that is treated as non-passive is subject to the limitation of paragraph (d)(2) of this section.