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Your company must continue to file a Company Tax Return and pay Corporation Tax on taxable profits arising from: Your company will pay any Corporation Tax due during the winding-up period at the same rates as before the winding up period started.In some cases, where you continue not to pay your company’s Corporation Tax, HM Revenue and Customs () will apply to the court for a winding up order to have your company closed down.

You are selling the shares in your business for the market value of the business as a whole.If a trust is created outside of Chapter 11 of the Bankruptcy Code, a private letter ruling may be requested if conditions of Revenue Procedure 82-58 are met.Under Revenue Procedure 82-58, the IRS will issue a private letter ruling if 8 conditions are met.Should the purpose of the entity change, such as to carry on a for-profit business, then the entity will no longer be considered a liquidating trust.Also, if the time period is unreasonably prolonged, the status of the entity may change from a liquidating trust.The liquidating trust normally has a lower cost structure than the existing fund and is managed on an "as needed" basis by the trustee as opposed to a full-time basis for the fund.The trustee takes control of the newly formed liquidating trust.For example, if you sell some equipment for more than you paid for it.Download PDF When "Liquidating Trust" is mentioned, most people associate this with bankruptcy.A liquidating trust is a new legal entity that becomes successor to the liquidating fund.The remaining assets and liabilities are transferred into the newly formed trust and the former owners of the liquidating fund become unit holders or beneficiaries of the trust.


  1. Tax consequences are generally the same as if the corporation was liquidated as a C-Corporation because the entire gain will be subject to the regular corporate income tax treatment. For planning purposes, practitioners should also remember that the net built-in gain rule only applies if liquidation distribution occurs within.

  2. The tax consequences of corporate liquidations may be of importance in a great variety of situations. Has an opportunity arisen to sell or buy a corporate business? Is a conversion from the corporate to the partnership or individual form of business contemplated? Is it desired to reduce the capitalization of a corporation due.

  3. Liquidated into its parent corporation.8. Where gain or loss is realized and recognized, the assets received by the shareholders obtain a new basis9 and new holding period'0 for tax purposes. 5 When assets are purchased, this starts a new holding period for the assets, and the basis of the assets to the purchaser is their.

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