The tax basis of property received by a non-corporate shareholder in a complete liquidation will be the property's fair market value.

Question

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When a non-corporate shareholder receives property in a complete liquidation, the tax basis of that property is equal to its fair market value. This is because the shareholder is considered to have received the property in exchange for their stock, which is considered to have a zero tax basis. Therefore, the shareholder's tax basis in the property is equal to the fair market value of the property at the time of the exchange.

The Tax Basis of Property Received by a Non-Corporate Shareholder