Tax consequences of liquidating a corporation Sex book chatting for free
Health Savings Accounts (HSAs) were created as a tax-favored framework to provide health care benefits mainly for small business owners, the self-employed, and employees of small- to medium-sized companies who do not have access to health insurance.The tax benefits of HSAs are quite favorable and substantial.A sale of stock by noncorporate shareholders (e.g., individuals) generally results in long-term capital gain that is taxed at a current maximum rate of 15%.(This long-term capital gain rate is currently scheduled to increase to 20% in 2013.) Because of the single level of taxation associated with a taxable stock sale, sellers usually prefer it to an asset sale followed by liquidation of the corporation, which may result in a greater tax liability.The IRS suggests taxpayers keep a set of backup records in a safe place away from the original set.This is more easily accomplished now that many financial institutions provide statements electronically and other financial information is readily available on the Internet.The 2012 inflation-adjusted deduction for individual self-only coverage under a high deductible plan is ,100, while the comparable amount for family coverage is ,250.
Next, taxpayers should photograph or videotape important personal or business assets.
The purpose of this article is to alert you to the tax planning opportunities that exist if you intend to tap into that hard-earned business cash.
Historically, dividend treatment has been something to avoid because of the double taxation issue.
Then, the shareholders are taxed on the liquidation proceeds as if they had sold their stock for the cash and any property distributed in complete liquidation of their stock, resulting in double taxation.
While sellers generally favor stock transactions, they may prefer an asset sale in the following circumstances: The selling corporation may have unused net operating loss or capital loss carryforwards that can offset any corporate-level gain on the sale of its assets.
The tax results of an asset sale are generally less favorable to the sellers since the corporation is generally liquidated to get the sales proceeds into the sellers' hands.