Discuss the tax consequences of a complete liquidation to the liquidated corporation and to the shareholders.
What will be an ideal response?
The liquidated corporation generally recognizes gains and losses on distributions of property. A restriction is placed on recognition of losses in related party situations if the property is not distributed pro rata to all shareholders or consists of disqualified property. Disqualified property is property acquired by the liquidating corporation in certain tax-free transfers from shareholders during the five-year period preceding the distribution.
In a complete liquidation, shareholders are deemed to sell their stock to the corporation in exchange for money or other property. If the stock is a capital asset, capital gain or loss is recognized equal to the difference between the money plus the FMV of the property distributed to the shareholders in the liquidation and the adjusted basis of the shareholder's stock. The basis of the property received is its FMV on the date of distribution.
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A perfected purchase money security interest in inventory is likely to have priority over a conflicting security interest in the same inventory if the:
A. holder of the competing security interest received notification within eight years before the debtor receives the inventory. B. purchase money secured party gives an oral notification to the prior secured creditor before the debtor receives the inventory. C. notification states that the person expects to acquire a purchase money security interest in inventory of the debtor and describes the inventory. D. purchase money security interest is perfected three months after the debtor receives possession of the inventory.
NAFTA is an agreement among
A. Canada and the U.S. B. Mexico, Panama, Canada, and the U.S. C. Mexico, Canada, and the U.S. D. Mexico and the U.S.
Strategic planning and financial planning
A) should be performed independently during supply chain network design. B) should be performed sequentially during supply chain network design. C) should be performed concurrently during supply chain network design. D) should be combined during supply chain network design.
Eliza is a state court judge. Flora appears in a case in Eliza's court, claim-ing that Glover breached a contract. Which of the following actions may Eliza take?
a. Award damages or issue a decree of specific performance b. Imprison Glover, but not Flora c. Imprison Flora, but not Glover d. Order the parties to pay Eliza to render a favorable ruling