Discussion:C-Corp Dissolution
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Discussion Forum Index --> Tax Questions --> C-Corp Dissolution
| 2 February 2006 | |
| My client has closed his C-corp and I am not sure of how to report this on his 1040. This is a PA corporation and any information on this topic would be greatly appreciated. | |
| 3 February 2006 | |
| There are 2 taxable issues you have to deal with. The first is on the 1120. Property (including cash) distributed to shareholders in a liquidation is treated as a sale by the corporation. Gain/loss will be FMV of assets distibuted less adjusted basis of those assets. Recogntion of losses might be limited. The second issue takes place on the 1040. The shareholder is treated as having sold his stock for the assets received. The shareholder has a capital gain/loss determined by subtracting his stock basis from the FMV of the property received from the corporation. Needless to say, this is a basic description which omits a number of details. | |
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