Final answer:
The holding period of gifted property is relevant for tax purposes and is determined by the original owner's holding period. In a business sale involving many shareholders, the money distribution happens post-sale based on ownership stakes.
Step-by-step explanation:
When discussing the holding period of gifted property and basis issues for gifts in a business context, particularly in cases where a large number of shareholders are involved, the holding period is significant for tax purposes and depends on the original owner's acquisition date. For property acquired via gift, the recipient generally assumes the donor's basis and holding period, which means that if the original owner held the property for more than a year, the recipient would inherit a long-term holding period.
This determination is critical for understanding capital gains tax implications upon the disposition of the asset. When a company with a large number of shareholders is sold, shareholders typically receive money based on their proportionate ownership in the company. This distribution occurs once the company goes through the sale process, which may include negotiations, due diligence, and final transaction completion.