Taxation of liquidating distributions

Posted by / 23-Sep-2019 18:17

Taxation of liquidating distributions

The taxable gain, if any, recognized by the seller (either individual investors or corporate shareholders) upon the sale of stock or assets is equal to the purchase price less the tax basis in the stock or assets sold.

If the tax basis exceeds the sale price, the seller recognizes a loss on the transaction rather than a gain.

In a taxable stock acquisition, the buyer acquires stock from the target company's shareholders, who are taxed on the difference between the purchase price and their basis in the assets sold, and the selling corporation's shareholders are taxed on the distribution of sale proceeds.

When a parent company develops a subsidiary internally, rather than through acquisition, the parent's inside and outside bases in the assets and stock of the subsidiary, respectively, are equal.

In most cases, assets are initially recorded at acquisition cost for both book and tax purposes.

Headquartered in , HTA has developed a national brand with dedicated relationships at the local level.

Founded in 2006 and listed on the New York Stock Exchange in 2012, HTA has produced attractive returns for its stockholders that have significantly outperformed the S& P 500 and US REIT indices.

As in a regular stock purchase, the parent will assume a carryover basis in the assets acquired, so the parent's outside basis will likely exceed its inside basis.

Alpha acquires the stock of freestanding C corporation Tango for in cash.

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