Liquidating Distributions

Liquidating Distributions means:
the distributions made by a corporation to shareholders during partial or complete liquidation of the corporation. A liquidating distribution is not taxable to the shareholder until his or her basis is recovered. After the basis in the stock is reduced to zero, the remainder of the distribution is normally a capital gain. If the total liquidating distributions are less than the shareholder's basis, a capital loss results, which can be reported after the last distribution is received.

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.