Distributions to Related Persons - Loss Recognition Is Disallowed When

Distributions to related persons - Loss recognition is disallowed when the liquidating corporation makes a distribution to a related person,as defined in Sec.267(b),if (1)the distribution is not pro rata or (2)the property distributed is disqualified property.Disqualified property is property acquired by the corporation in a Sec.351 tax-free formation or as a capital contribution during the five-year period ending on the distribution date or property having an adjusted basis that carries over from a disqualified property.