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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.

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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.