Tax consequences of liquidating a corporation

However, in 2013 (barring any intervening tax legislation) this favorable tax rate will expire.

A planning strategy for a closely held C corporation is to calibrate shareholder-employee salary and bonus payments to reduce the corporation's annual taxable income to the ,000 level and minimize the combined shareholder-owner/corporate tax liability.

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If the shareholders' stock basis exceeds the value of the liquidation proceeds, gain at their level could also be avoided.

The credit equals 10% of the vehicle's cost, up to a ,500 maximum credit for purchases made before 2012. This credit equals 10% of the cost of converting a vehicle to a qualified plug-in electric drive motor vehicle that is placed in service before 2012. Please contact us to discuss these electric vehicle credits or any other tax planning or compliance issue.

With the 2011 hurricane season officially under way and highly destructive tornadoes striking throughout the country earlier this year, it's a good time to review some IRS suggestions for safeguarding tax records.

The tax results of an asset sale are generally less favorable to the sellers since the corporation is generally liquidated to get the sales proceeds into the sellers' hands.

Thus, a C corporation is taxed on the gain from the asset sale.

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