Cash liquidating distribution
In general, with regular dividends, on and after the ex-dividend date, a seller is still entitled to the payout even if she/he has already sold it to a buyer.Essentially, a person who owns the security on the ex-dividend date will receive the distribution, regardless of who currently holds the stock.
If any part of the capital gain distribution reported in box 2a may qualify for this exclusion (taking into consideration the recipient's holding period), report the gain in box 2c, and furnish the recipient a statement that reports separately for each designated section 1202 gain the: If a RIC or REIT holds any qualified tax credit bonds, any interest that the RIC or REIT recognizes on the bonds is included in the RIC's or REIT's gross income. See Notice 2010-28, available at IRS.gov/irb/2010-15_IRB#NOT-2010-28. Trustees and middlemen must report the gross amount of dividend income attributable to a trust income holder (TIH) in the appropriate box on Form 1099-DIV, if that amount exceeds .
Under section 1202, a 50% exclusion may be allowed on the gain from the sale or exchange of qualified small business stock issued after August 10, 1993, and held for more than 5 years.
A 60% exclusion may be allowed if the stock is empowerment zone business stock acquired after December 21, 2000, but not on gain attributable to periods after December 31, 2018.
In addition to a liquidating dividend, companies have a set order in which they must re-pay their owners in the event of a liquidation.
Liquidation can occur when a company is insolvent and cannot pay its obligations when they come due, among other reasons.