If a shareholder receives cash from a corporation in complete liquidation of his or her ownership interest and the cash received is less than the shareholder's basis in the stock,the shareholder will report a loss.

Question

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If a shareholder receives cash from a corporation in complete liquidation of his or her ownership interest and the cash received is less than the shareholder's basis in the stock, the shareholder will report a loss. This loss is treated as a capital loss, which can be used to offset capital gains or up to $3,000 of ordinary income.

If a Shareholder Receives Cash from a Corporation in Complete