H c liquidating corporation

11-Feb-2020 23:16

The general expenses involved in liquidating a corporation are deductible to the corporation as business expenses under Section 162, including legal and accounting expenses and expenses relating to the disposition of corporate assets.

A copy of the minutes of the shareholders' meeting in which the plan of liquidation was adopted must be attached to the final corporate income tax return for the liquidating corporation.

When property distributed in a complete liquidation is subject to a liability of the liquidating corporation, the fair market value of that property cannot be less than the amount of the liability.

There are two exceptions found in Sections 332 and 338.Information returns Form 1099) must be transmitted to each shareholder on or before January 31 of the year following the liquidation.in addition, Form 1096 which notifies shareholders of their respective gains or losses must be sent to the IRS by February 28.Section 336 provides that, with the exception of property distributed to a parent in complete liquidation of a subsidiary, gain or loss is recognized to a liquidating corporation on the distribution of property in complete liquidation as if such property were sold to the distributee at the fair market value.

Thus, liquidating distributions are subject to tax both at the corporate level and at the shareholder level.

Under the 1986 act, the General Utilities doctrine was repealed, with a few exceptions: distributions in kind, sale of investment assets and the Section 1231 element as to assets used in a trade or business.