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:

Question

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Under a plan of complete liquidation, the basis of the property received by the parent corporation is equal to the basis of the stock surrendered, and the basis of the property received by the minority shareholder is equal to the basis of the stock surrendered plus any gain recognized. In this case, Dusty Corporation's basis in the property received is $300,000, and Susan's basis in the property received is $20,000 + ($60,000 - $20,000) = $60,000.

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 $\begin{array} { | l | l | } \hline \text { Dusty } & \text { Susan } \\\hline \$ 300,000 & \$ 20,000 \\\hline\end{array}$