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The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164 (d) as imposed on the taxpayer.Is basis calulated as would be in a partnership or s-corp?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.Nonliquidating corporate distributions are distributions of cash and/or property by a continuing corporation to its shareholders.
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 corp President is coming to the office tomorrow and we will go over all of the information. I'm thinking of the sunset provisions for the 7% AMT preference (AMTI = alternative minimum taxable income with respect to the alternative minimum tax, aka AMT): Article: Tax/Tax Exclusion_"The Jobs and Growth Tax Relief Reconciliation Act of 2003 (P. 108-27) amended Code §57(a)(7), resulting in only 7 percent of the excluded gain being included in AMTI. Because IRC 1202 applies to the gain recognized by shareholders, it is the timing of the shareholders' gain that should go through before 12/31/10... The corporation will file a final return too (check a box on Form 1120). Well of course 10% of the liquidating dividend is to go to the 10% owner's.