Liquidating sale

The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts.

When a corporation undergoes liquidation, the money received by stockholders in lieu of their stock is usually treated as a sale or exchange of the stock resulting in its treatment as a capital gain or loss for Income Tax purposes.Evaluate the costs involved in your asset disposition plan as well as the potential costs (legal and otherwise) of not doing it.Create an aggressive, yet realistic timeline for completion, and methodically begin the process.Before liquidating assets it may be helpful to consult your lawyer and accountant or other tax professional for assistance in planning the liquidation.Also, remember that if you are liquidating assets to satisfy creditors you may need to obtain their consent to do so.

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