Top. Inc., a New York corporation, is in the process of being liquidated. Top Inc. has two shareholders: (i) GEF Corp., a Delaware corporation, wh
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Get it written →Top. Inc., a New York corporation, is in the process of being liquidated. Top Inc. has two shareholders: (i) GEF Corp., a Delaware corporation, which owns 90% of the stock ($9,000 basis), and (ii) Harriet R, who owns 10% of the stock ($1,000 basis). After selling almost of all its assets, Top Inc. distributes cash ($100,000 total) to its shareholders. GEF Corp. receives $90,000 and Harriet receives $10,000.
- What is the U.S. tax treatment of the distribution to GEF on the liquidation of Top Inc.?
- What is the U.S. tax treatment of the distribution to Harriet on the liquidation of Top Inc.?
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