Question

ire Corporation distributes property (basis of $225,000, fair market value of $300,000) to a shareholder in a distribution that is a qualifying stock redemption. The property is subject to a liability of $160,000 that the shareholder assumes. Determine the basis of the property to the shareholder.

Answer 1

$300,000

Step-by-step explanation:

The fair market value of the property is the basis in property received in a qualifying stock redemption to shareholder which is $300,000.

So, $300,000 is the amount that will serve as the basis of the property to the shareholder.