The built-in loss limitation in a complete liquidation does not apply to losses attributable to a decline in a property's fair market value after its transfer to the corporation.

Question

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The built-in loss limitation is designed to prevent the recognition of losses that are attributable to a decline in the property's fair market value after its transfer to the corporation, thus it does not apply to such losses.

The Built-In Loss Limitation in a Complete Liquidation Does Not