Liquidating distributions cash proceeds

08-Dec-2017 04:23

This strategy is commonly used by investors who are looking to accumulate shares in the underlying stock.

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Issuers of news releases and not OTC Markets Group Inc.

Stated in a more simple manner, a disproportionate distribution will not be treated as creating a second class of stock, provided the underlying stock provides both A and B with identical to the distribution, despite the fact that a distribution happened to be made disproportionately.

That being said, in order to avoid jeopardizing its S election, the corporation would be well advised to make a corrective distribution (even though that distribution will also be disproportionate) as soon as possible.

PLR 201236003 Over the years, the IRS has interpreted the disproportionate distribution rules fairly liberally.

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Last Friday, in PLR 201236003, an S corporation had made disproportionate distributions for what appears to have been several years.

Notwithstanding the foregoing, the Agent reserves the right to remit any net cash proceeds from such sale prior to the completion thereof, in more than one remittance.

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