Corporation Liquidation

[Harvey Lucas]

Client has a C-Corp that we intend to Liquidate.

Instructions say to file IRS form 966 to do so.

Instructions for 966 say attach a "certified copy", of the "resolution or plan".

I assume they want us to attach a copy of the corporation minutes where we resolve to terminate the corporation and Liquidate all of the remaining assets, true?

What is a "certified copy", and how do we get one?

Sincerely,

Harvey Lucas

[Bees Knees]

A certified copy of the resolution or plan to liquidate the corporation is a copy that has been proven to be true. You first need to have the board of directors adopt the plan, in writing. Then take it someplace to certify its authenticity. I tell my clients to have all of the corporate officers sign the thing in front of a notary.

[Harvey Lucas]

Certified Copy

Thanks Bees,

The Corp I need to Liquidate is a Nevada C-Corp.

I went to Nevada Corp division web site and they have downloadable Disolution forms.

Their fee schedule indicates a seperate fee if you want a "certified" copy of the Articles of Disolution.

Accordingly, we will have a meeting and minutes of the Board of Directors proposing disolution.

Then we will have a meeting and minutes of the shareholders approving the disolution.

Then we will have the directors, officers and shareholders sign the "Nevada articles of disolution"

Then we will send it to Nevada and pay an extra fee for the return of a "Certified Copy".

Then we will attach all of the above to the IRS form 966 and mail it to the IRS Service Center where the client normally files their 1120.

Then we will close the Corporation's bank account and disburse the proceeds to the lone shareholder in a Liquidating distribution.

We will then file a final 1120 short year tax return, but will not have to "annualize" income since it is the corporations "final" year.

We will also file a 1099-div, and indicate in the appropriate section that we made a liquidating distribution.

The individual client shareholder will report the Liquidation dividend distribution amount on her 2007 1040 schedule D as a Sale, compare it to her basis in the Corporation, and report a gain or loss as the case may be.

Am I missing anything?

Thank You
Harvey Lucas

[Bees Knees]

Everything looks good to me.

Just one more reason not to incorporate. You wouldn't have to do any of those things if this were an LLC going out of business.