Tax on liquidating dividend
The tax rate on qualified dividends depends on the taxpayer's top income tax bracket.And, in 2013 and going forward, qualified dividends are also subject to the net investment income tax of 3.8%. A dividend is generally a corporate distribution to shareholders, based on their stock holdings, made out of current or accumulated earnings and profits, unless the distribution is specifically treated as a non-dividend by tax law (e.g., as a redemption or liquidation distribution).
I think I am making this more complicated than needs be?On the other hand, retirement plan contributions or benefits may be reduced if dividends are taken instead of compensation.Balancing the tax advantages and disadvantages of dividends vs. Disclaimer Copyright © 2017, Endowment Development Services, Inc., 921 East 86th Street, Suite 100, Indianapolis, Indiana 46240. This service is designed to provide accurate and authoritative information in regard to the subject matter covered.Mutual funds will report to individual investors the portion of their dividends eligible for the reduced rates.Ineligible Dividends The special tax rates do NOT apply to dividends paid by, among other things: Mutual insurance companies Credit unions, mutual savings banks, savings and loans, and certain other types of financial institutions Nonprofit voluntary employee beneficiary associations (VEBAs) Employer securities owned by an employee stock ownership plan ( ESOP) to the extent the dividends are deductible under IRC Sec.If the total liquidating distributions you receive are less than the basis of your stock, you may have a capital loss.You can report a capital loss only after you have received the final distribution in liquidation that results in the redemption or cancellation of the stock.Is basis calulated as would be in a partnership or s-corp?based on percentage of ownership and contributions to the corp, loans etc.The C Corp I am working with just went thru an asset sale of the company and will report the gain on sale. After all entries are made, gain on sale, taxes paid, etc we have left common stock and retained earnings. The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164 (d) as imposed on the taxpayer.