1.26 Ark. Code R. 51-413
Amounts distributed in complete liquidation of a corporation are to be treated as in full payment in exchange for the stock, and the amounts distributed in partial liquidation are to be treated as in part or full payment in exchange for the stock so canceled or redeemed. The phrase "amounts distributed in partial liquidation" means a distribution by a corporation in complete cancellation or redemption of all of its stock, or one of a series of distributions in complete cancellation or redemption of all or a portion of its stock.
The gain or loss to a shareholder from a distribution in liquidation is to be determined by comparing the amount of the distribution with the cost or other basis of the stock. In the case of amounts distributed in partial liquidation, other than a distribution in pursuance of a plan of reorganization as described in ACA 26-51-412, the part of such distribution which is properly chargeable to capital account shall not be considered a distribution of earnings or profits within the meaning of ACA 26-51-411 for the purpose of determining the taxability of subsequent distribution by the corporation.
1.26 Ark. Code R. 51-413