In accounting why liquidating is declaired

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Keep your tax records for at least seven years, to protect against the possibility of future audits.John Cromwell specializes in financial, legal and small business issues.

Also, stock exchanges or other appropriate securities organizations determine an ex-dividend date, which is typically two business days before the record date.While many firms pay regular dividends, there are special cash dividends that are distributed to shareholders after certain non-recurring events, such as legal settlements or borrowing money to make large one-time cash distributions.Each company establishes its own dividend policy and periodically assesses if a dividend cut or an increase is warranted. A company's board of directors announces a cash dividend on a declaration date, which entails paying a certain amount of money per common share.All dividends must be declared by the board of directors, and they are taxable as income to the recipients.Long-term investors who want to maximize their gains should consider reinvesting their dividends.

The former target company stockholders transfer their basis to their new stock, and when they sell their acquiring company stock they will use that figure to calculate their taxable gain or loss.

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