Liquidating & Non-Liquidating Entity Distributions

When a business entity is contemplating either a liquidation or making non-liquidating distributions to its owners, there are bound to be a variety of tax consequences. Non-liquidating distributions are distributions of cash and/or property made by the entity to its owners, that do not result in the dissolution of the entity.  At the entity level, there are a variety of tax consequences that can occur when making a non-liquidating distribution. Depending on how the entity is taxed, at the owner level, a non-liquidating distribution can create several different tax consequences, including taxable dividend treatment, capital gain or loss, or a reduction in stock basis.  Understanding and planning for these effects requires the advice of experienced counsel.

Our attorneys have the experience and knowledge to assist you whether you are the sole owner of an entity or part of an ownership group, or the sole shareholder and/or a director of the corporation. We discuss with our business clients all of the tax benefits and consequences of structuring a transaction in a particular manner. We focus on the needs and desires of each individual client, and help them achieve their business and individual goals.