Tax consequences of liquidating direct dating com uk

30 Apr

Consider the taxation of payments for unrealized receivables.After all, there is generally little, if any, actual economic difference between the liquidation of a partner’s interest and a sale of that interest.However, the differences in tax consequences between a sale and liquidation can be quite significant.(In the case of “substantially appreciated” partnership inventory, the departing partner will have ordinary income regardless of whether the transaction is a sale or liquidation.) Furthermore, whereas the remaining partners will receive a cost basis for the departing partner’s share of the inventory if the transaction is a liquidation, the remaining partners in the case of a transaction structured as a sale will be able to increase their basis only if a Section 754 election is in effect.In a liquidation, moreover, payments for unstated goodwill will generate ordinary income to the departing partner and ordinary deductions for the remaining partners.

The XYZ Inc has only 7K in cash and it needs to come up with additional 5K.

The XYZ Inc offers the departing shareholder NJ peace of land to cover the 5K shortfalls. The shareholder accepts the offer and receives 4K in cash and NJ land.