Definition of liquidating dividend
– Loss basis = lower of FMV at date of gift and adjusted basis of the donor (a built-in gain can be transferred, but not a built-in loss) – increased for the portion of any gift tax paid by the donor due to appreciation in the property D. Damages received for emotional distress, employment or age discrimination, or injury to reputation: taxable; Attorney’s fees and other suit: deductible, limited to the income included. Employer Purchased Policies Medical expense reimbursements and workman’s compensation payments are excluded Reimbursement for loss of wages: taxable Disability insurance benefits: taxable III.Holding Period: gain basis is used, period includes that of the donor; loss basis is used, start from the date of gift. Inheritances – Basis: fair market value at the date of death, or the FMV on the alternate valuation date (six months after the date of death) if that date is selected by the executor as the valuation date – Holding Period: long-term F. Alimony Taxed to the recipient and the payor is granted a deduction Payments to a former spouse that do not qualify as alimony are treated as a division of property: nontaxable to the recipient and nondeductible by the payor. Definition: Any payment that is not specifically identified, is presumed to satisfy child support obligations before other obligations C. Fringe Benefits A.a group-term policy of $50,000 face value Over 50,000: taxable, rate based on table (related to age) Accelerated death benefits excluded if the insured taxpayer is terminally or chronically ill C.Special front loading rules require recapture of deductions and income if alimony payments decline more than $15,000 over the first 3 years after the divorce. Health insurance premiums: nontaxable Self-employed individuals can deduct 100% of premium for self, spouse, and dependents with limit of net earnings from self-employment D.Accountable Plans: The employer must require the employee to accept lodging as a condition of employment to be excluded from income G.
Definition of liquidating dividend comments