Liquidating equity consolidating vehicle loans

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Shareholders that do not have a strong preference on whether distributions in 2012 are taxed as dividends or capital gain/loss may prefer sale or exchange (capital) treatment in 2012 if they: Shareholders that assume corporate liabilities or receive property subject to corporate liabilities take the liabilities into account in computing their gain or loss.

They do not increase their basis in the property received on liquidation because doing so would give them a double tax benefit.

The proceeds of the sale are used to discharge any outstanding liabilities to the creditors of the company.The firm's stock was trading over the counter for 2¢ per share at the time of the announcement.the process by which a JOINT-STOCK COMPANY' S existence as a legal entity ceases by the winding-up of the company Such a process can be initiated at the behest of the CREDITORS where the company is insolvent (a compulsory winding-up), or by the company directors or SHAREHOLDERS, in which case it is known as a voluntary winding-up.Instead, the liability reduces the amount realized by the shareholder.If the property distributed is worth less than the amount of the liability itself, the FMV of the property is treated as no less than the amount of the liability (Sec. The assumption of a contingent or unknown liability is disregarded in determining the property’s FMV. A corporation, whether it uses the cash or accrual basis, may have earned income that it has not collected before the liquidation takes place.

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