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accountants themselves owned the intangibles, and, thus, there
was no transfer nor any corresponding taxable gain attributable
to these intangibles.
Generally, gain or loss must be recognized by a liquidating
corporation on the distribution of property in complete
liquidation as if such property were sold to the distributee at
its fair market value. Sec. 336(a). Petitioners do not contend
that the provisions of section 336(a) should not apply here. The
corporation must recognize gain calculated as the difference
between the fair market value of the distributed property and the
corporation's basis in that property.
Moreover, amounts received by the shareholders in a
distribution in complete liquidation of the corporation must be
treated as in full payment in exchange for the corporation's
stock. Sec. 331(a). The shareholders must recognize any gain on
the receipt of the property in the liquidating distribution. The
gain to the shareholder is computed by subtracting the
shareholder's adjusted basis in the stock from the amount
realized. Sec. 1001(a); sec. 1.331-1(b), Income Tax Regs. The
amount realized is the sum of any money received on the
distribution plus the fair market value of the property received
(other than money).3 Sec. 1001(b). This gain is reduced by the
3Sec. 1.331-1(e), Income Tax Regs., provides that a
shareholder's gain or loss on a liquidating distribution be
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