You don't want to give up your 1202 stock over this either... I would suggest the family work this out amongst themselves in general and keep the tax stuff nice and clean. Should you specifically want me or another expert to answer your question, you can request us and we'll generally answer if available (use the JA function or type "for so-and-so" at the beginning of your question. Thank you for your response, you clarified what I told the corp pres yesterday.I do check my e-mail and try to respond when available. This is between family and keep the tax stuff simple.I think I am making this more complicated than needs be?Except as provided in subparagraph (B), that portion of the distribution which is not a dividend, to the extent that it exceeds the adjusted basis of the stock, shall be treated as gain from the sale or exchange of property.The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164 (d) as imposed on the taxpayer.Is basis calulated as would be in a partnership or s-corp?I know you will be gone this weekend but I think we have all the answers to this questions just need to work on the mechanics.The corp books and the sale are clean and simple, it is the family stuff that should have been worked out long before this and I think they understand the issue fairly well.
This was effective for dispositions on or after May 6, 2003. The shareholders should all receive their $ before year end. But I don't see how they could be stock owners when no stock was issued at the 5 year mark.
This corp is new to me - but I have worked with the shareholders individually and to my knowledge only one dividend has been paid, a 1099-DIV was prepared and distributed.
If I understand correctly - a liquidating dividend is different the a regular dividend in that the dividend is taxed only to the extend the amount exceeds stock basis.
This distinguishes a liquidating dividend from regular dividends, which are issued from the company's operating profits or retained earnings. A liquidating dividend may be made in one or more installments. S., a corporation paying out liquidating dividends will issue to its shareholders a Form 1099-DIV showing the amount of the distribution.
Despite the tax advantages, investors who receive liquidation dividends often find that they do not cover their initial investment.