WHETHER PLANNING FOR A LIQUIDATION of their own professional practices or advising clients about the liquidation of a commercial organization, CPAs will find that the problems and the solutions associated with each are likely to be the same.
awyers advise CPAs to have employment and noncompete agreements in their accounting practices.
Liquidation is generally accomplished by either selling these assets or transferring all of the shares in the corporation.
Possible reasons requiring liquidation are the closing or sale of the business or changing the business structure to provide more favorable tax treatment.
These distributions are reported on Form 1099-INT, Interest Income.
Interest in the form of an original issue discount, such as original issue bonds sold for less than par value, is reported on Form 1099-OID, Original Issue Discount.
I think I am making this more complicated than needs be?
Except as provided in subparagraph (B), that portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock, shall be treated as gain from the sale or exchange of property.
I mostly work with S-corp and partnerships - basis calculation for C corp stock is the same?
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).
As part of every liquidation, state and federal income, payroll and capital gains taxes must be paid at both the corporate and individual levels.
A C corporation is a business entity governed by Subchapter C of the Internal Revenue Code.