Situation c. Gammaro Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis to Brett, a 66.67% shareholder. Gammaro purchased the marketable securities three years ago. Gammaro distributes $90,000 cash to Sharon, a 33.33% shareholder.

Corporation distributes marketable securities having a $180,000 FMV and a $290,000 adjusted basis and cash of $90,000. Gammaro purchased the marketable securities three years ago. Brett is a 66.67% shareholder and Sharon a 33.33% shareholder. Assume the securities and cash are each distributed two-thirds to Brett and one-third to Sharon.

HOW WAS 'SHAREHOLDERS BASIS FIR PROPERTY RECEIVED' CALCULATED?

Gain or loss recognized Character Shareholder Property Amount Shareholder's Change necessary basis for to improve the property received tax consequences 1 $ 120,000 60.000 d. $ 110,000 Capital loss Brett Marketable securities Cash Sharon 60.000 Marketable securities Cash 30,000