An S Corporation is liquidated. It distributes its only asset (Basis $100,000, FMV $150,000) to its sole shareholder. The shareholder's stock basis is $80,000. What is the shareholder's total recognized gain?

1. S Corp recognizes gain on distribution: $150,000 - $100,000 = $50,000. <br/>2. This $50,000 passes through to the shareholder (recognized gain). <br/>3. Shareholder basis increases: $80,000 + $50,000 = $130,000. <br/>4. Shareholder recognizes gain on liquidation (exchange of stock): Amount Realized ($150,000) - Adjusted Basis ($130,000) = $20,000. <br/>5. Total recognized gain = $50,000 + $20,000 = $70,000.