During 2017, Track Corporation distributes property to Cindy as part of a complete liquidation. Property included in the distribution is $30,000 in cash, land with a $40,000 adjusted basis and a $60,000 FMV, and a copyright without an ascertainable FMV and having a zero basis. The first payment to Cindy of $8,000 for use of the copyrighted property occurs in 2018. Cindy has a basis in the Track stock of $95,000 immediately preceding the liquidation. The minimum amount of gain that Cindy must recognize is a

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In a complete liquidation, the shareholder recognizes gain to the extent that the fair market value of the property received exceeds the basis in the stock. Here, Cindy receives $30,000 in cash and land with a $60,000 FMV, totaling $90,000. Since her basis in the stock is $95,000, she does not recognize any gain in 2017. The copyright payment in 2018 is not part of the liquidation distribution.

During 2017, Track Corporation Distributes Property to Cindy as Part