Classic, Inc., a C corporation, distributed property to its sole shareholder as part of a complete liquidation.
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Classic, Inc., a C corporation, distributed property to its sole shareholder as part of a complete liquidation. Classic's adjusted basis in the property was $660,000. The property had a fair market value of $730,000 at the time of the distribution and was subject to a liability of $700,000. The shareholder's tax basis in Classic's stock was $740,000. Why does the liability not affect Classic's gain on distribution?
Related Book For
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st edition
Authors: David M. Maloney, William H. Hoffman, Jr. , William A. Raabe, James C. Young
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