Consequently, the limitations imposed by 336(d) on a liquidating corporation's recognition of loss are not applicable. recognized a loss of ,000 on making the liquidating distribution of Whiteacre to C.above, except that 100% of Whiteacre was distributed to A and the remaining assets of X Co. Since the distribution of Whiteacre to A, a related person, was not pro rata, X Co. D owns 60 shares of Y Co.'s stock, and E owns the remaining 40 shares of Y Co.'s outstanding stock. In 2003, D contributed Whiteacre (unimproved land) to Y Co.

Anza shareholders liquidating video

purchased a Whiteacre (unimproved land) in 1990 at a cost of $30,000. was liquidated and distributed its assets among its three shareholders. Since C owned only 20% of X Co.'s outstanding stock, C is not a related person to X Co. To be a related person, C would have had to have actual and constructive ownership of stock of X Co.

As noted in , Whiteacre is not disqualified property.

were distributed among its three shareholders in such manner as to make the totality of its distributions pro rata.

, except that 100% of Whiteacre was distributed to C and the remaining assets of X Co.

At the time of liquidation, Y Co.'s basis in Whiteacre was still $50,000; but the fair market value of Whiteacre had fallen to $40,000.

While the distribution of Whiteacre was pro rata, Whiteacre was disqualified property within the meaning of 336(d)(1)(B).

It does not matter that Whiteacre was appreciated property when it was contributed to Y Co.; it matters only that the land was contributed to Y Co. Whiteacre to D (a related person) cannot be recognized. realized on the distribution of a 40% interest in Whiteacre to E is recognized. had only one class of stock outstanding, and it was voting, common stock.

At the time of X Co.'s liquidation, the fair market value of Whiteacre was ,000, and X Co. On the liquidating distribution of Whiteacre, X Co. Since Whiteacre was not disqualified property and since Whiteacre was distributed pro rata among X Co.'s three shareholders, the limitations of 336(d) on a liquidating corporation's recognition of loss do not apply.

distributed a 60% interest in Whiteacre to A, a 20% interest in Whiteacre to B, and a 20% interest in Whiteacre to C. also were distributed pro rata among X Co.'s shareholders.