If a liquidation qualifies under § 332, any minority shareholder will recognize gain or loss equal to the difference between the fair market value of assets received and the basis of the shareholder's stock.

Question

Quizplus · Accepted Answer

In a § 332 liquidation, the parent corporation does not recognize gain or loss, but minority shareholders do recognize gain or loss on the difference between the fair market value of assets received and their stock basis.

If a Liquidation Qualifies Under § 332, Any Minority Shareholder