What is a liquidating dividend ashlee simpson dating
This means that the business sells off not just any inventory it may have, but its tools of production, building and any other assets it may have.
The purpose of this exercise is to gain the money necessary to pay off its debts and then to distribute the remainder to its shareholders through a liquidating dividend.
When one company merges with another, both sides generally want to avoid recognizing any gain on the transaction.
As a result, the tax code allows for tax free mergers, or reorganizations.
If you purchased the stock at different times, divide the dividends into short-term and long-term proportionally, based on when each block of stock was acquired.Keep your tax records for at least seven years, to protect against the possibility of future audits.John Cromwell specializes in financial, legal and small business issues.Creditors are always senior to shareholders in receiving the corporation's assets upon winding up.However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders.
Only the amount that exceeds the taxpayer's basis in the stock is capital; this is taxed as a capital gain.