How does Revenue Ruling 80-213 amplify Ruling 59-60?

Revenue Ruling 80-213 amplifies Ruling 59-60 by specifically addressing the valuation of subsidiary stock distributed to shareholders. While Ruling 59-60 provides a framework for the valuation of closely held businesses, including considerations such as earnings, cash flow, and market comparisons, Ruling 80-213 expands on these principles by focusing on how to value stock from subsidiary entities during dividend distributions.

This ruling is important because it clarifies how subsidiaries' valuations must be approached differently when assessing their impact on shareholders, particularly in terms of how those valuations relate to the overall value of the parent company. By understanding this amplification, professionals can better navigate the complexities of equity distributions and ensure accurate appraisals of subsidiary interests, which is critical in various tax and financial reporting scenarios.

The other options do not capture the essence of how Ruling 80-213 elaborates on Ruling 59-60 in the context of business valuation, particularly the specific focus on subsidiary stock, which is a crucial aspect of this guidance.