Corporate liquidating dividend
A sunset provision reverts back the law to its original language for taxable years beginning after December 31, 2010. Could their distribution be classifyied as a bonus, subject to payroll tax issues? Your perception seems good on this one with respect to the payroll taxes, though that will be based on personal circumstances.
The information you gave me yesterday was so helpfull. It can almost become a legal question too depending on how much fighting between family members goes on...
based on percentage of ownership and contributions to the corp, loans etc.
I mostly work with S-corp and partnerships - basis calculation for C corp stock is the same?
The corp President is coming to the office tomorrow and we will go over all of the information. I'm thinking of the sunset provisions for the 7% AMT preference (AMTI = alternative minimum taxable income with respect to the alternative minimum tax, aka AMT): Article: Tax/Tax Exclusion_"The Jobs and Growth Tax Relief Reconciliation Act of 2003 (P. 108-27) amended Code §57(a)(7), resulting in only 7 percent of the excluded gain being included in AMTI. Because IRC 1202 applies to the gain recognized by shareholders, it is the timing of the shareholders' gain that should go through before 12/31/10... The corporation will file a final return too (check a box on Form 1120). Well of course 10% of the liquidating dividend is to go to the 10% owner's.
Thank you for all your help and I do like Just Answers and will continue to send questions to you if okay.
A domestic corporation in the Philippines would normally declare dividends in the Philippines to distribute its earnings accumulated through the unrestricted or free retained earnings.
More dividend distribution means more earnings for the stockholders and would attract more potential investors.
This corp is new to me - but I have worked with the shareholders individually and to my knowledge only one dividend has been paid, a 1099-DIV was prepared and distributed.
If I understand correctly - a liquidating dividend is different the a regular dividend in that the dividend is taxed only to the extend the amount exceeds stock basis.