Chapter c 4 corporate nonliquidating distributions
The book similarly would be useful to accountants who are pursuing a master of science in taxation, as well as accountants practicing in the area of business entity taxation.
C16-Chap-00-Tst-4-Exm-Prb-May-2-2016-POST-May-2-2017 C16-Chap-00-Tst-4-Exm-Sol-May-2-2016-POST-May-2-2017 C17-Chap-00-Sample Tax Memo – by a student in the Tax Research Class C17-Chp-00-Code-Organization-Chart-and-CPA Exam Contents C17-Chap-00-DELOITTE-tax_research_guide C17-Chap-00-Tst-3-Exm-Prb-for Spring-2017 C16-Chap-00-Tst-3-Exm-Prb-2016–POST-for Spring-2017-Final C16-Chap-00-Tst-3-Exm-Sol-2016–POST-for-Spring-2017-Final For Question no.
How the corporation and its shareholders treat distributions for tax purposes depends on not only what the corporation distributes but also the circumstances surrounding the distribution. Was the distribution made in exchange for some of the shareholder s stock?
The preceding sentence shall apply to any distribution to the 80-percent distributee only if subsection (a) or (b)(1) of section 337 applies to such distribution. Note that the IRS often titles documents in a very plain-vanilla, duplicative way.
For purposes of clause (i), any property described in clause (i)(I) acquired by the liquidated corporation after the date 2 years before the date of the adoption of the plan of complete liquidation shall, except as provided in regulations, be treated as acquired as part of a plan described in clause (i)(II). to become effective upon the exercise of such option agreement (or modification thereto), and the assets are sold pursuant to the exercise of the option (as originally executed or subsequently modified provided that the purchase price is not thereby increased), or in the event that the optionee does not acquire substantially all the assets of the corporation, the optionor corporation sells substantially all its assets to another purchaser at a purchase price not greater than that contemplated by such option agreement pursuant to an effective plan of liquidation, and For purposes of subparagraph (A), a distribution, or sale, or exchange, of a distributee corporation (within the meaning of section 337(c)(3) of the Internal Revenue Code of 1986) shall be treated as satisfying the requirements of subparagraph (A) if its subsidiary satisfies the requirements of subparagraph (A).
The Secretary may prescribe regulations under which, in lieu of disallowing a loss under subparagraph (A) for a prior taxable year, the gross income of the liquidating corporation for the taxable year in which the plan of complete liquidation is adopted shall be increased by the amount of the disallowed loss. 100–647, § 1006(e)(21)(A), substituted “liabilities” for “liabilities in excess of basis” in heading. For purposes of section 56 of the Internal Revenue Code of 1986 (as amended by this Act), any gain or loss not recognized by reason of this paragraph shall not be taken into account in determining the adjusted net book income of the corporation.
The other shareholders feel that the tracts will appreciate at about the same rate, so they are willing to distribute any of the tracts. ’s shares would be redeemed, and because he is unrelated to the remaining shareholders, the redemption would qualify for stock sale (capital gain) treatment as a complete termination of a shareholder’s interest under Sec. A corporation is generally allowed to recognize tax losses when depreciated property is distributed to shareholders in complete liquidation of the corporation (Sec. cannot deduct a loss on a nonliquidating distribution of depreciated property.
Conversely, if it distributes appreciated property it must recognize gain as if it had sold the property to the shareholder for its FMV.