Section 35-3-08-01-101 - Effect on Shareholders:1. Shareholders shall report any distribution by the corporation to them at its fair market value. The basis of any stock surrendered shall be applied against and reduce any gain on the property received. Gain shall be reported by the shareholder on the difference between the basis of the shareholder and the fair market value of the property received.2. A credit for the tax paid by the distributing or liquidating corporation from the gain of the sale or gain on the distribution of property will be apportioned to each shareholder. The shareholder should attach Form 62-465, that has been furnished by the corporation, to his income tax return to be allowed credit for the tax paid by the corporation. A shareholder who receives an installment note in return for the surrender of a portion or all of his stock may report his gain on the installment method; however, the credit for tax paid by the distributing corporation is only allowed in the year the property is distributed to the shareholder. The credit is applied against, but limited to, the tax liability from this gain reported by the shareholder and none of the credit may be refunded. A loss must be reported in the year of distribution to the shareholder.3. Distributions received by one corporation in complete liquidation of another corporation are treated as full payment in exchange for stock in the other corporation. Gain realized to the shareholder corporation from the distribution is recognized and shall be treated as ordinary income. A loss sustained is deductible in full in the tax year of the distribution.35 Miss. Code. R. § 3-08-01-101