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If the corporation was a regular C corporation before it received S corporation status, tax consequences might result for assets that appreciated in value while operating as a C corporation.

Regardless of whether you are closing the business, converting to another type of entity or selling the corporation, certain documents are normally requested by the IRS if a liquidation occurs.

He studied electrical engineering after a tour of duty in the military, then became a freelance computer programmer for several years before settling on a career as a writer.

A fine line exists between definitions of a corporate liquidation and dissolution.

But for tax purposes, the defining line can make a big difference.

Witness the situation described in recent letter from the Internal Revenue Service (LTR 200806006, November 7, 2007), which addresses a seeming anomaly related to the tax code.

Any gains are then taxable to the shareholders, less the shareholder's basis or investment in stock.

Jeffrey Joyner has had numerous articles published on the Internet covering a wide range of topics.

The company was “administratively dissolved” some time after, for example, effective January 25, 2008, due to its failure to timely pay state franchise taxes.

Company management, however, was blissfully unaware of this development and continued to file the business’s federal corporate income tax return and pay all federal income taxes.

However, it is possible to make certain generalizations.

Selling a corporation involves both stock and the company's assets.




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