Pursuant to a liquidation, Coral Corporation distributes to Lucinda, a shareholder, land (basis of $90,000, fair market value of $200,000). The land is subject to a $75,000 liability. Lucinda will have a basis of $125,000 in the land.

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Lucinda's basis in the land will be $90,000, which is Coral Corporation's basis in the land. The liability does not affect the basis of the property received in the distribution.

Pursuant to a Liquidation, Coral Corporation Distributes to Lucinda, a Shareholder