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.

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Definitions:

Rose/Fell

Terms used to indicate an increase (rose) or a decrease (fell) in a numerical value or metric.

GDP

GDP measures the aggregate value of all goods and services made within the confines of a nation over a specified period.

Internally Generated Funds

Finance obtained from the business's own operations, not through borrowing or new equity.

Investment

The allocation of resources, such as capital, time, or effort, in expectation of generating future profit or income.