Tax consequences of liquidating Sex chat without regisration
based on percentage of ownership and contributions to the corp, loans etc.I mostly work with S-corp and partnerships - basis calculation for C corp stock is the same?This is for 'regular' or non-liquidating distributions in general.The corp is sold and no longer doing business, so the liquidating dividend would be a sale of stock.If a gift, is this really just a tax avoidance scheme...?The related party rules would have losses disallowed on a sale of stock between family members, but gains would be recognized generally, and with a gift the basis would transfer to the recipient from the transferor if the fair market value of the stock exceeds the transferor's basis at the time of the gift. Edit: I was thinking of my above response, and since a lot people get this confused, I will point out that we 'experts' on Just Answers are users of the platform, like you, and not employees of Just Answers or anything. I personally will be traveling this weekend, so I doubt I'll be around a computer, but other experts are here too and can assist if you ask a new question / opt me out at any time.The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016.The C Corp I am working with just went thru an asset sale of the company and will report the gain on sale. After all entries are made, gain on sale, taxes paid, etc we have left common stock and retained earnings. The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).
Is basis calulated as would be in a partnership or s-corp?
We knew the taxation of this sale was going to be brutal. Long story short, 2010 may be a good year if that is when the liquidation went/goes through. They were talking about a partial distribution now and some next year - may not be a good idea. In general, the liquidation is complete for a shareholder when he/she forfeits the stock in exchange for the cash. Well, an agreement was signed between another sister and brother-in-law and son that they would own 10% of the company after 5 years.
I just wanted make sure I had a handle on the situation. 109-222, §102." Here is IRC 57(a)(7) being referred to in the article: General rule For purposes of this part, the items of tax preference determined under this section are- ...(7) Exclusion for gains on sale of certain small business stock An amount equal to 7 percent of the amount excluded from gross income for the taxable year under section 1202. The liquidation will take place for all shareholders at the same time, but as a technicality, it is the 'liquidation of the shareholders' interest' that will trigger the capital gain (assuming a corporation wanted to continue, it would be a purchase of the shareholder's stock directly as opposed to via a liquidation generally, should a single shareholder get bought out by the corporation or a third party). No stock was issued and nothing was paid in for ownership other than they were employees of the company.
The corporation has to pay the gains on the 'asset sale' while the shareholders receive liquidating distributions of cash (taxed at capital gains rates if in excess of their basis). What happens if a shareholder contributes ,000 (therefore starting with a basis of ,000), and I buy his shares for ,000. The corporation keeps track of E&P for dividend purposes per above (dividends are income to receipients out of E&P), but otherwise the liquidation is like a sale of the stock. We are down to the wire for tax law extensions, possibly, so we are trying not to miss anything.
My basis then becomes ,000, but nothing has changed on the corporate balance sheet. Section 301 (relating to effects on shareholder of distributions of property) shall not apply to any distribution of property (other than a distribution referred to in paragraph (2)(B) of section 316 (b)) in complete liquidation.(1) Within 30 days after the adoption by the corporation of a resolution or plan for the dissolution of the corporation or for the liquidation of the whole or any part of its capital stock, make a return setting forth the terms of such resolution or plan and such other information as the Secretary shall by forms or regulations prescribe; and(2) When required by the Secretary, make a return regarding its distributions in liquidation, stating the name and address of, the number and class of shares owned by, and the amount paid to, each shareholder, or, if the distribution is in property other than money, the fair market value (as of the date the distribution is made) of the property distributed to each shareholder. I read and understood the reporting of corp liquidation. If all money is distributed and the 966 is filed with the IRS by the end of the year 12/31 will the liquidation be complete? The C-corp is a family business, the shares of stock are owned by a brother, sister and brother-in-law.
This corp is new to me - but I have worked with the shareholders individually and to my knowledge only one dividend has been paid, a 1099-DIV was prepared and distributed.