Classic, Inc., a C corporation, distributed property to its sole shareholder as part of a complete liquidation. Classic's adjusted basis in the property was $660,000. The property had a fair market value of $730,000 at the time of the distribution and was subject to a liability of $700,000. The shareholder's tax basis in Classic's stock was $740,000. Can you explain what Classic adjusted basis in property entails/means? Next, is the liability of $700,000 factored in this adjusted basis or is it a separate component? Thanks.