Cash basis liquidating distributions

Posted by / 08-Jul-2017 03:03

This is the case whether that sale is only deemed to have occurred under Sec.

338(h)(10) or was an actual sale of the S corporation's assets.

However, the regulations provide otherwise where the S corporation receives and distributes an installment note plus other property or cash as part of the sale of its assets.

All but the traditional general partnership have limited liability, and a general partnership can, in most states, achieve limited liability by a simple filing to become an LLP, but, particularly for professionals that limited liability protects against vicarious liability but not against liability for one's own malpractice, including, of course malpractice in giving advice related to partnership tax matters. Distribution to Contributing Partner - Section 737 C. Certain Liquidating Distributions to Corporate Partners 2. Basis Allocations in a Series of Liquidating Distributions 4.

All but the general partnership can also have continuity of life, centralized management and free transferability of interest, subject only to the usual practical problems of transferring interests in closely held businesses. Basis of Property Received in Liquidation of a Partner's Interest 1.

Company management, however, was blissfully unaware of this development and continued to file the business’s federal corporate income tax return and pay all federal income taxes.

Eventually, company officers learned of their plight and reincorporated the business in the same state.

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A fine line exists between definitions of a corporate liquidation and dissolution.