Liquidating distribution capital gain

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Whether the amount qualifies for short or long-term capital gains depends on the trade date – the purchase date -- of the sale.For tax purposes, the holding period begins on the day after the trade date.

It can be recognized only after the corporation has made its final distribution, or at least its last substantial distribution. Contributor Robert Willens, founder and principle of Robert Willens LLC, writes a regular tax column for Long-term capital gains apply if the holding period is at least one year and a day from the trade date.Conversely, if an investor does not recover the total investment, she can report a capital loss.In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.A fine line exists between definitions of a corporate liquidation and dissolution.

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