Chapter_20_Liquidating_Distributions

Chapter_20_Liquidating_Distributions - or contribution to...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 20 – Corporations: Liquidating Distributions Corporation §336(a) o Recognize both gains and losses as if sold at FMV FMV of property given -adjusted basis of property given Realized Gain (Loss) Recognized gain (loss) = realized gain (loss) If liability transferred > adjusted basis; FMV ≥ liability transferred o Exceptions: Losses are not recognized on liquidating distributions to related-party shareholders if: The distribution is not pro rata The property distributed is disqualified property o Acquired in a §351 transaction or a contribution to capital transaction within 5-years of the distribution Losses are not recognized on liquidating distributions of built-in loss property if: Acquired in a §351
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: or contribution to capital transaction Acquisition was part of a plan whose principal purpose was to recognize a loss on that property by the liquidating corporation (presumed in cases of transfers occurring within 2 years of the adoption of a plan of liquidation) Subsidiary corporation does not recognize gains or losses on liquidating distributions to its parent corporation 332 Subsidiary corporation does not recognize losses on liquidating distributions to its minority shareholders 332 Shareholder 331(a) o FMV of property received-basis in stock Realized gain Recognized gain (capital gain) = realized gain o Basis in property received = FMV of property received...
View Full Document

Page1 / 2

Chapter_20_Liquidating_Distributions - or contribution to...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online