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Trying to understand the differences between S-Corp vs C-Corp liquidating and non-liquidating distributions. Specifically, the gains/losses to both the shareholders and the corporations as well as the basis rules.

Does anyone have an example problem or an easy way to understand this?

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Also – How would this change if they owned 70%?

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Hi Everyone,

I'm a little unclear on basis/gain/loss for S Corp Liquidations.

I made the below question up:

ABC is liquidating (X is sole shareholder). X's beginning basis in ABC is 15,000. ABC has the following assets:

Land – 10,000 FMV 5,000 Basis
Equipment – 7,000 FMV 2,000 Basis
Property – 3,000 FMV 8,000 Basis

What is X's Gain/Loss and Basis related to each asset after the liquidating distribution?

Thanks!

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When are you taking your exam? I am taking my exam next month! July 17th

What exam topic keeps you awake at night? Individual Taxation

One study or career tip others might find helpful. For MCQ when studying, take time to understand the answer to questions in full instead of just reading over the answer and moving on to the next question.

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