Greg, a cash method of accounting taxpayer, owns 100 shares of Parker Corporation stock with a basis of $20,000. Greg receives two liquidating distributions of $8,000 on March 3 of last year, and $8,000 on August 8 of this year. The amount of the second distribution is not known until June 15 of this year. Greg recognizes

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Greg recognizes no loss last year because the first distribution of $8,000 does not exceed his basis of $20,000. This year, after receiving the second distribution of $8,000, his total distributions are $16,000, which is still less than his basis. Therefore, he recognizes a $4,000 loss this year ($20,000 basis - $16,000 total distributions).

Greg, a Cash Method of Accounting Taxpayer, Owns 100 Shares