If a Liquidation Qualifies Under § 332, Any Minority Shareholder

question 50

True/False

If a liquidation qualifies under § 332, any minority shareholder will recognize gain (but not loss) equal to the difference between the fair market value of assets received and the basis of the shareholder's stock.

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Definitions:

Winding-up Partners

The process of closing down a partnership, involving settling its debts and distributing any remaining assets among the partners.

Partnership Agreement

A legal document outlining the terms and conditions under which a partnership operates.

Implied Novation

A legal concept where a new contract is assumed to replace an old one due to the actions or situations of the parties involved, without this being explicitly stated.

Actual Novation

The replacement of an existing obligation with a new one, extinguishing the original obligation and creating a new contract with different terms.