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Liquidation Planning Shareholder loans

  • 1.  Liquidation Planning Shareholder loans

    Platinum Most Valuable Member
    Posted 08-11-2019 07:50
    Hello

    as a closely held client is preparing for liquidation of their "C" corp. i notice there are substantial loans from shareholder . if those loans are forgiven, wouldn't that generate income to the corp ?
    If yes, could they not be recast as " contributed capital " ?  and then by pass the gain to the corp?

    Any comments appreciated.


    Abby

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    Abby Alhante
    KURCIAS & ALHANTE, CPAs LLC
    Melville NY
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  • 2.  RE: Liquidation Planning Shareholder loans

    Silver Most Valuable Member
    Posted 08-12-2019 13:52
    ​I would not forgive the loans - is the client looking for a deduction?

    Perhaps the loan can be distributed back to the individual as part of the liquidation.

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    Robert Barnett
    CPA, ESQ.
    Capell Barnett Matalon & Schoenfeld LLP
    JERICHO NY
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