Dexer Corporation is owned 70% by Amy and 30% by Brad. Dexer Corporation owns Eagle Corporation stock with a $50,000 adjusted basis and a $30,000 FMV. The stock is not disqualified property. As part of a complete liquidation, the Eagle Corporation stock is distributed to Amy. Amy's basis in her Dexer stock is $40,000. Dexer Corporation will recognize

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Dexer Corporation will recognize no loss on the distribution of Eagle Corporation stock to Amy as part of a complete liquidation because the stock is not disqualified property and the distribution is to a related party (Amy owns more than 50% of Dexer). Under IRC Section 336(d), losses are not recognized on distributions to related parties in complete liquidations.

Dexer Corporation Is Owned 70% by Amy and 30% by Brad