Corporate Liquidations
Author: Jennifer Kowal
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
It is often said that corporations are like lobster traps, easy to get into and hard to get out of. The tax consequences of liquidating a corporation vary, depending on the facts involved and the form the liquidation takes. Liquidations to non-corporate shareholders generally require paying a corporate level tax, while subsidiary liquidations do not. This course covers the tax consequences of both types of corporate liquidations, from the shareholder and corporation’s. perspectives.
Publication Date: May 2022
Designed For
Tax practitioners at all levels who advise on the liquidation of corporations.
Topics Covered
- Corporate Liquidations Overview
- Liquidation vs. Dissolution
- Tax Treatment
- Statutory Rules
- Liquidations — Intro.
- Property Distributions
- Loss Limitations
- Sections 332 & 337 — Basic Rules
- Associated Wholesale Grocers
- Section 332/337: Miscellaneous
- Tax Consequences of §351
- Entity Conversions
- C Corporation to LLC Conversion
- Pitfalls?
Learning Objectives
- Recognize and explain the difference between a section 331 and section 332 liquidation and the tax consequences of each
- Identify how to calculate gain or loss on corporate liquidations of both types, from corporate and shareholder perspectives.
- Describe how to determine tax basis of property received in corporate liquidation
- Recognize how to gain familiarity with potential tax pitfalls in corporate liquidations
- Differentiate private letter rulings
- Describe when a corporation ceases activity and winds up its affairs
- Identify which section prescribes that a corporation generally recognizes gain or loss on distribution of assets
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
Basic understanding of liquidation of corporations.
Advance Preparation
None
