H c liquidating corporation definition dating wikipedia
The corp is to be liquidated in some fashion upon death, and then distributed to equally along with other assets, to mostly 4 children. How can you rate me as giving bad service when you didn't make yourself available to discuss your questions.
This is supposed to be a "chat" service which requires us to have a discussion.
To the extent that a distribution is made from the corporation’s earnings and profits, it is taxed to the shareholder as a dividend. The portion of the distribution that is not considered a dividend is applied first to reduce the shareholder’s basis in the corporation’s stock. Any remaining portion is treated as gain from the sale or exchange of property (capital gain). Important Note: If a shareholder assumes a liability or takes property subject to a liability, the amount of the distribution is reduced by the amount of the liability. Special rules also apply at the corporate level. Special rules apply to distributions to a shareholder in exchange for the shareholder’s stock (redemptions).
Instead of being treated as dividends, redemptions are treated as a sale or exchange of the stock by the shareholder. The distinction can be important when the long-term capital gains rates (which apply to redemptions) are higher than the tax rates on dividends.
A corporation will not recognize any gain or loss on a distribution of cash to its shareholders. But if the corporation distributes appreciated property, the corporation must recognize gain as if the property were sold to the shareholder at fair market value. Important Note: These two rules operate as a loss disallowance system.
The rules governing distributions from C corporations differ from the rules that apply to distributions from S corporations.well my questions about the shareholder loans picked up on that statement; you don't avoid dividend treatment by taking money out of the corporation through shareholder loans; at least as far as the IRS would assert; paying them back after he passes away does absolutely no good as far as previous withdrawals.I do want to do things in accord with IRS directives .The above is more of an answer than I got uyesterday. I ws hoping you'd give me an answer of ask more questions . I was wondering about C corp shareholder loans receivable upon death.The above at least tells me that you consider past loans to be dividends. Are they taxable to the sole shareholder in year of death? The corporation can't "by back" 100% of its stock, they corporation will have to exchange its assets with its shareholders for its stock in liquidation.