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Street property to her. Ms. Ng contends that because Strong Hope
sold its interest in the Stockton Street property to her, after the
sale, it had an asset, namely, the $110,000 that IES paid to the
IRS on Strong Hope's behalf and which Strong Hope claims should be
refunded to it.
We previously determined that Ms. Ng did not acquire an
interest in the Stockton Street property from Strong Hope in a
section 1031 exchange transaction. In our opinion, the correct
characterization of the transfer of Strong Hope's interest in the
Stockton Street property to Ms. Ng is a distribution of property,
not a sale.
A liquidating distribution of property by a corporation to a
shareholder is taxable to the shareholder as gain from the sale or
exchange of property to the extent the distribution exceeds the
shareholder's basis in his stock. Any distribution that is part of
a series of distributions under a plan to redeem all outstanding
stock is treated as a liquidating distribution. Sec. 346(a).
Liquidating distributions are treated as full payment for a
shareholder's stock. Sec. 331(a). To find a corporate
liquidation, there must be a manifest intention to liquidate and a
continuing purpose to terminate corporate affairs, and the
corporation's activities must be directed to such termination.
Estate of Maguire v. Commissioner, 50 T.C. 130, 142 (1968).
The parties stipulated that Strong Hope's sole U.S. business
activity was the rental of its individual one-half interest in the
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