Tax consequences liquidating corporation Cu xxx

According to the IRS, it is seeing these conversions where the S corporation's primary business is property development or homebuilding.

Often the current fair market value of the property is lower than the outstanding liability associated with the property.

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Tax Treatment of S Corporation Liquidations Under Code Sec.

1371, except as otherwise provided in the Code, and except to the extent inconsistent with subchapter S, the provisions relating to C corporations apply to an S corporation and its shareholders.

In addition to taking advantage of the lower rates for indi­viduals, the pass-through entity eliminates double taxation associated with the payment of dividends from C corporations.

Although both S corporations and partnerships are now tax-favored entities, there are differences between the two.

There are subtle (and some not so subtle) differences between the two entities from a tax perspective as well.

Last modified 18-Apr-2017 04:26