Capital gain distributions refer to payments made by mutual funds or corporations to their investors, representing the gains earned from the sale of securities or liquidated assets. This distribution retains its character as capital gains when passed on to investors.
A corporation that dissolves before realizing a substantial portion of the taxable income to be derived from its properties. The Internal Revenue Service (IRS) treats the gain on the sale or liquidation of a collapsible corporation as ordinary income to the stockholder.
Complete Liquidation refers to a series of distributions that redeem all the stock of a corporation under a specific plan.
A liquidation dividend is a payment distributed to shareholders during the process of winding up a business, after settling obligations with its debtors and creditors. This distribution represents the remaining assets proportionate to shareholders' equity.
The process by which a taxpayer receives a return of cost through distributions or payments with respect to a property. A recovery of basis is generally nontaxable if it follows a taxable distribution of earnings and profits from a corporate liquidation.
