A had a basis of ,000 in Whiteacre, and the fair market value of Whiteacre at that time was ,000.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by ,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only ,000 and X Co.acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of ,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.

acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.

: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.

If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.

recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.

acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.

: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.

If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.

recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.

acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.

: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.

If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.

recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

will provide a double deduction for the amount of depreciation in Whiteacre's value - i.e., both A and X Co. If 336(d)(2) is applicable, X Co.'s basis in Whiteacre for purposes of determining a loss on that property must be reduced by $40,000 (the difference between the basis that X Co. would have a basis in Whiteacre of only $10,000 and X Co.acquired in Whiteacre and its value at the time X Co. therefore would not recognize a loss when it distributed Whiteacre to B. acquired Whiteacre in a 351 exchange less than two years prior to adopting a plan of liquidation, there is a presumption that the property was acquired as part of a plan, the principal purpose of which was to have X Co. will recognize a loss of $4,000 on making the *distribution* to B. above, except that instead of distributing Whiteacre to B, X Co. adopted a plan of liquidation three years after it acquired Whiteacre.: Shareholder A owns 20 shares of stock in X Co., ten of which were acquired in 1998 at a cost of $1,500 and ten of which were acquired in December, 2002 at a cost of $2,900. On February 1, 2003, T, Y, and Z all adopt plans of complete liquidation.If A receives a *distribution* of $250 per share in April, 2003, he will have a long-term capital gain of $1,000 on the shares he acquired in 1998 ($2,500 less $1,500) and a short-term capital loss of $400 on the ten shares he acquired in December, 2002 ($2,900 less $2,500). On March 1, 2003, the following sales are made to unrelated purchasers: T sells the assets of its operating division to B for cash and an installment obligation.recognize a loss in connection with its liquidation (see 336(d)(2)(B)(ii)). distributed Whiteacre to B, the fair market value of Whiteacre was only $6,000; and X Co. For loss purposes, X Co.'s basis in Whiteacre is $10,000; and so it will recognize a $4,000 loss. **distribution** Whiteacre to B, the fair market value of Whiteacre was $20,000. sold Whiteacre for its fair market value of $10,000, and X Co. Assuming that 336(d)(2) is applicable, X Co.'s basis for Whiteacre was $10,000; and so X Co. Since X Co.'s basis for computing a gain was $50,000, X Co. Because of the time differential, it is unlikely that the Commissioner could establish that X Co.

It is likely, therefore, that 336(d)(2) will apply and that X Co. Assuming that 336(d)(2) is applicable, X Co.'s loss basis in Whiteacre was ,000; and so X Co. For the purpose of measuring a gain, X Co.'s basis in Whiteacre is ,000; and so X Co. acquired Whiteacre as part of a plan, the principal purpose of which was to have X Co.

While A realized a ,000 loss on the exchange with Y Co., A did not recognized any amount of loss because of 351. acquired the same basis in Whiteacre that A had, - namely, ,000. stock that she received in exchange for Whiteacre is the same as the basis that she had in Whiteacre, - namely, ,000. made a *liquidating* *distribution* to B of Whiteacre plus ,000 cash.

As a result, after the exchange, A held 80 shares of X Co.'s stock with an aggregate value of ,000; and A had an aggregate basis in those 80 shares of 0,000 (,000 in 70 shares and ,000 in ten shares). At that time, Whiteacre had a value of ,000, and X Co.'s basis in Whiteacre was ,000. realized a loss of ,000 on making the **liquidating** **distribution**. made a **liquidating** **distribution** to A of ,000 cash.

: A owns 150 shares of the only class of stock of X Co. T sells the stock of X to C for an installment obligation.

A purchased 50 shares in 1997 at a cost of ,000, 50 shares in 1998 at a cost of ,000, and 50 shares in 1999 at a cost of ,000. makes a series of **distributions** to its shareholders in redemption of all of its outstanding stock. Y sells all of its assets to D for an installment obligation. The B, C, and D installment obligations bear adequate stated interest and meet the requirements of 453.

recognize a loss in connection with its liquidation. : A, an individual, owns all of the stock of T corporation, a C corporation.