Depending upon statute, liquidation can precede or follow dissolution.Dissolution Oxford Dictionary of English: the action of formally ending or dismissing an assembly, partnership, or official body: Barron’s Finance & Investment Dictionary: Ending (dissolving) of the legal existence of a corporation after the sale of its assets and the satisfaction of its creditors and its owners.purchased a Whiteacre (unimproved land) in 1990 at a cost of ,000.
had only one class of stock outstanding, and it was voting, common stock.
At the time of X Co.'s liquidation, the fair market value of Whiteacre was ,000, and X Co.
Since C owned only 20% of X Co.'s outstanding stock, C is not a related person to X Co.
To be a related person, C would have had to have actual and constructive ownership of stock of X Co.
, except that 100% of Whiteacre was distributed to C and the remaining assets of X Co.
At the time of liquidation, Y Co.'s basis in Whiteacre was still ,000; but the fair market value of Whiteacre had fallen to ,000.D owns 60 shares of Y Co.'s stock, and E owns the remaining 40 shares of Y Co.'s outstanding stock.In 2003, D contributed Whiteacre (unimproved land) to Y Co.As noted in , Whiteacre is not disqualified property.were distributed among its three shareholders in such manner as to make the totality of its distributions pro rata.and to distribute the proceeds therefrom to the Beneficiaries.