Liquidating vs nonliquidating distributions Virtual sex dating sites
If the shareholder has multiple bases in her stock, the exact amount of the gain or loss will depend on whether there are single or multiple liquidating distributions.
To the extent that the shareholder has basis in the S corporation stock, distributions to the shareholder are tax free.
Distributions to investors up to their cost basis—the amount invested, including commissions and fees—in the stock is considered a non-taxable return of principal.
Amounts above investors' cost basis are reported as capital gains, a taxable distribution.
Proceeds from a cash liquidation distribution can be either a non-taxable return of principal or a taxable distribution, depending upon whether or not the amount is more than the investors' cost basis in the stock.
The proceeds can be paid in a lump sum or through a series of installments.
This allows partners to defer recognition of gain in appreciated property that they receive from the partnership.
This loss can only be reported once the firm issues a final cash liquidation distribution. The distributions are returned to investors per the capital structure of the business.