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The stock in Palm Corporation is held equally by two brothers. One year before its liquidation,...

The stock in Palm Corporation is held equally by two brothers. One year before its liquidation, the shareholders transfer property (basis of $350,000, fair market value of $200,000) to Palm Corporation in return for stock. In a current year liquidation, Palm Corporation transfers the property (now worth $150,000) pro rata to the brothers. What amount of loss will Palm Corporation recognize on the distribution?

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Palm Corporation will not recognize any loss on the distribution of the property worth $150000 when it is transferred to the brothers on pro rata basis in the current year liquidation

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