A shareholder's basis in property acquired in a stock redemption is the property's fair market value as of the date of redemption.

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In a stock redemption, when a shareholder receives property, the basis of that property for the shareholder is its fair market value on the date of the redemption. This basis is used for calculating gain or loss if the property is later disposed of.

A Shareholder's Basis in Property Acquired in a Stock Redemption