Dusty Corporation owns 90% of Palace Corporation's stock and Susan owns the remaining stock. Dusty Corporation's stock basis is $300,000 and Susan's stock basis is $20,000. Under a plan of complete liquidation, Dusty Corporation receives property with a $400,000 adjusted basis and a $540,000 FMV and Susan receives property with a $20,000 adjusted basis and a $60,000 FMV. The bases of the properties are:

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Under a plan of complete liquidation, the basis of the property received by each shareholder is equal to the shareholder's basis in the stock of the liquidating corporation multiplied by the ratio of the FMV of the property received by the shareholder to the FMV of all property received by all shareholders.Dusty Corporation's basis in the property received is $300,000 x ($540,000/$600,000) = $400,000.Susan's basis in the property received is $20,000 x ($60,000/$600,000) = $20,000.

Dusty Corporation Owns 90% of Palace Corporation's Stock and Susan Dusty Susan $300,000$20,000\begin{array} { | l | l | } \hline \text { Dusty } & \text { Susan } \\\hline \$ 300,000 & \$ 20,000 \\\hline\end{array} Dusty $300,000​ Susan $20,000​​

Dusty Corporation Owns 90% of Palace Corporation's Stock and Susan $\begin{array} { | l | l | } \hline \text { Dusty } & \text { Susan } \\\hline \$ 300,000 & \$ 20,000 \\\hline\end{array}$