One similarity between the tax treatment accorded nonliquidating and liquidating distributions is with respect to the recognition of losses by the distributing corporation.As a general rule,a corporation recognizes losses on both nonliquidating and liquidating distributions of depreciated property (fair market value less than basis).

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Corporations generally do not recognize losses on nonliquidating distributions of depreciated property, but they may recognize losses on liquidating distributions.

One Similarity Between the Tax Treatment Accorded Nonliquidating and Liquidating