Liquidating dividends and tax treatment Pinoy sex chat without registration

The question of who “owns” the client relationships and customer-based intangibles turns on whether an employment or noncompete agreement is in effect at the time of the distribution.

According to the IRS, when a corporation distributes “clients and customer-based intangibles” to its shareholders, IRC sections 331 and 336 apply; such intangibles include the corporation’s client base, client records, workpapers and goodwill (including going-concern value).

But what they might not say is that employment and noncompete agreements can create serious income tax consequences when a firm or corporation is liquidated and goodwill assets such as client relationships are distributed among the shareholders.

There is the possibility of some relief, however: A CPA firm and its shareholders are in a better position to avoid serious tax consequences if such agreements are not in place when the professional corporation is dissolved.

There’s little doubt that distributions of the tangible property to shareholders in a liquidation are taxable under section 336.

The corporation recognizes income on the excess of fair market value over adjusted basis.

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