Liquidating dividend accounting unvalidating

Posted by / 19-Oct-2019 13:16

The result is that the acquirer takes over the target and the former stockholders of the target company now become stockholders in the acquirer.

The former target stockholders get their acquirer stock from a liquidating dividend.

When you receive a liquidating dividend, the amount will be reported to you on a 1099-DIV form, in either box 8 or 9.

Only the amount that exceeds the taxpayer's basis in the stock is capital; this is taxed as a capital gain.

The basis in the stock is how much the taxpayer paid to obtain the stock.

The capital gain is treated as long-term or short-term depending on whether you owned the shares for longer than a year.

Hi, I'm just looking for a bit of guidance regarding the accounting treatment of a liquidation in the holding company under (old) UK GAAP.

Just wanted to know what I need to disclose in relation to this, and how this should look in the P&L.

John Cromwell specializes in financial, legal and small business issues.

Cromwell holds a bachelor's and master's degree in accounting, as well as a Juris Doctor.

For example, if a shareholder receives ,000 in cash along with stock from a merger and his investment had grown in value by ,000 based on his original investment of ,000, the following would occur.

The shareholder would have to report ,000 in gains and his new basis in the stock would be ,000.

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However, if the merger is for cash and stock, the target company's stockholders must recognize gain attributed to the transaction to the extent they received cash.

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