What happens to a corporation's tax attributes in a complete liquidation?

What happens to a corporation's tax attributes (e.g. earnings and profits, NOL carryforwards) in a complete liquidation? A corporation's tax attributes generally disappear in a complete liquidation, except when Sections 332 and 334 (b) (1) apply to the liquidation of a subsidiary.

What is a 331 liquidation?

331, a liquidating distribution is considered to be full payment in exchange for the shareholder's stock, rather than a dividend distribution, to the extent of the corporation's earnings and profits (E&P).

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Plan of complete liquidation and dissolution

Alameda California Plan of complete liquidation and dissolution

Name: Alameda California Plan of complete liquidation and dissolution
Brand: US Legal Forms
Rating: 4.62 (399 reviews)

Category:

Corporations - Public - Liquidation and Dissolution

State:

Multi-State

County:

Alameda

Control #:

US-CC-9-352

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Instant download

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This sample form, a detailed Plan of Complete Liquidation and Dissolution document, is a model for use in corporate matters. The language is easily adapted to fit your specific circumstances. Available in several standard formats.

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Identify the code section under which the corporation is to be dissolved or liquidated. For example, enter section 331 for a complete or partial liquidation of a corporation or enter section 332 for a complete liquidation of a subsidiary corporation that meets the requirements of section 332(b).

In a complete liquidation: the liquidating corporation distributes all of its assets to its shareholders, the assets are distributed in one or a series of distributions, the distributions are in redemption of all of the corporation's stock, the distributions are made pursuant to a plan of liquidation.

A liquidating distribution (or liquidating dividend) is a type of nondividend distribution made by a corporation or a partnership to its shareholders during its partial or complete liquidation. Liquidating distributions are not paid solely out of the profits of the corporation.

Complete liquidation When a corporation is completely liquidated, it transfers all of its assets to its shareholderswhether the assets are cash or propertyand the shareholders assume the corporation's remaining liabilities.

Shareholders who receive distributions in a complete liquidation recognize gain or loss as if they have received full payment in exchange for their stock. The shareholder's basis in property received in the complete liquidation is usually the property's fair market value.

What happens to a corporation's tax attributes (e.g. earnings and profits, NOL carryforwards) in a complete liquidation? A corporation's tax attributes generally disappear in a complete liquidation, except when Sections 332 and 334 (b) (1) apply to the liquidation of a subsidiary.

You must file Form 966, Corporate Dissolution or Liquidation, if you adopt a resolution or plan to dissolve the corporation or liquidate any of its stock. You must also file your corporation's final income tax return.

331, a liquidating distribution is considered to be full payment in exchange for the shareholder's stock, rather than a dividend distribution, to the extent of the corporation's earnings and profits (E&P).

For federal income tax purposes, each shareholder's receipt of the liquidating corporate distribution amount is treated as a sale of all the shareholder's stock in exchange for the distribution.

The complete liquidation is taxed to the extent the shareholder recognizes a gain or loss. A partial liquidation results in exchange treatment for a noncorporate shareholder.

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Alameda California Plan of complete liquidation and dissolution

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What code section is a liquidation?

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What happens to a corporation's tax attributes in a complete liquidation?

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