One Difference Between the Tax Treatment Accorded Nonliquidating and Liquidating

One difference between the tax treatment accorded nonliquidating and liquidating distributions is with respect to the basis of property received in the distributions.In a nonliquidating distribution (e.g.,qualifying stock redemption),the shareholder takes a basis in the property equal to the corporation's basis in the property,while the basis of property acquired in a liquidation is its fair market value on the date of the distribution.