If a liquidation qualifies under § 332, any minority shareholder will recognize gain (but not loss) equal to the difference between the fair market value of assets received and the basis of the shareholder's stock.

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If a liquidation qualifies under § 332, any shareholder (not just minority shareholders) will not recognize any gain or loss on the liquidation of their stock. This is because under § 332, the liquidation is treated as a complete redemption of the shareholder's stock, meaning that the shareholder is considered to have sold their stock back to the corporation at its fair market value. Therefore, the shareholder only recognizes gain or loss if the fair market value of assets received differs from the fair market value of their stock at the time of redemption, not their basis in the stock.

If a Liquidation Qualifies Under § 332, Any Minority Shareholder