What is a liquidating dividend dating and fish in the sea


28-Oct-2019 12:43

331 when they receive the liquidation proceeds in exchange for their stock.

The maximum tax rate for both long-term capital gains (realized after May 5, 2003, and before 2013) and dividends (for tax years beginning after 2002 and before 2013) is 15%.

A liquidating dividend represents a return of the shareholder's original investment.

Let's assume that the Tablet Universe Company has a retained earnings balance of 0,000 and a paid-up capital balance of

The maximum tax rate for both long-term capital gains (realized after May 5, 2003, and before 2013) and dividends (for tax years beginning after 2002 and before 2013) is 15%.

A liquidating dividend represents a return of the shareholder's original investment.

Let's assume that the Tablet Universe Company has a retained earnings balance of $200,000 and a paid-up capital balance of $1,500,000.

Then, the shareholders are treated as exchanging their stock for the FMV of the assets distributed in complete liquidation, with the resulting gains or losses at the shareholder level.

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The maximum tax rate for both long-term capital gains (realized after May 5, 2003, and before 2013) and dividends (for tax years beginning after 2002 and before 2013) is 15%.A liquidating dividend represents a return of the shareholder's original investment.Let's assume that the Tablet Universe Company has a retained earnings balance of $200,000 and a paid-up capital balance of $1,500,000.Then, the shareholders are treated as exchanging their stock for the FMV of the assets distributed in complete liquidation, with the resulting gains or losses at the shareholder level.

,500,000.

Then, the shareholders are treated as exchanging their stock for the FMV of the assets distributed in complete liquidation, with the resulting gains or losses at the shareholder level.

When determining whether a closely held corporation should be liquidated, the tax consequences to the shareholders should be considered.Unfortunately, no clear-cut guidance exists regarding the period over which liquidating distributions can be made. Shareholders should maintain documentation that multiple distributions are liquidating distributions whenever multiple distributions are necessary (especially if they will span several tax years and, therefore, result in tax deferral). The request limits the time for assessing tax or beginning a court action to collect the tax to 18 months from the date the request is filed. One example of a situation when a request for prompt assessment might be appropriate is the liquidation of a corporation because of shareholder differences. Keller, and Robert Popovitch, published by Thomson Tax & Accounting, Fort Worth, Texas, 2012 (800-323-8724; ppc.thomson.com).



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