Property Received in a Corporate Liquidation by a Noncorporate Shareholder

question 61

Multiple Choice

Property received in a corporate liquidation by a noncorporate shareholder has

• A)a basis equal to its basis on the liquidating corporation's books increased by any gain recognized by the shareholder upon receipt of the property. Its holding period includes the holding period of the shareholder's stock.
• B)a basis equal to its basis on the liquidating corporation's books increased by any gain recognized by the shareholder upon receipt of the property. Its holding period commences on the day after the distribution date.
• C)a basis equal to its FMV reduced by any liabilities assumed by the shareholder. Its holding period commences on the day after the distribution date.
• D)a basis equal to its FMV. Its holding period commences on the day after the distribution date.

---

Definitions:

Tax Revenue

The income that is collected by the government through various forms of taxation.

Excess Burden

The expense incurred by society due to market inefficiency, happening when there's a mismatch between supply and demand.

Tax Revenue

The earnings achieved by governments by levying taxes.

Excess Burden

The cost to society created by market inefficiency, mainly used in the context of taxes that cause consumers and producers to alter their behavior in ways that reduce economic well-being.