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    The anomaly is corporate dissolution without liquidation.In the ruling, a corporate taxpayer had been incorporated in a state on a particular date, let’s say January 19, 2007.However, it is possible to make certain generalizations.

    A fine line exists between definitions of a corporate liquidation and dissolution.It’s the final step in a corporate termination and the point at which IRS tax consequences start to apply.Corporations in the process of a complete liquidation – either to terminate the business or change its structure to a non-corporate status -- are required by law to transfer all cash and property assets back to shareholders as payment in full for the exchange of stock.This mainly occurs during voluntary liquidations of solvent corporations.Except as otherwise provided in this section or section 337, gain or loss shall be recognized to a liquidating corporation on the distribution of property in complete liquidation as if such property were sold to the distributee at its fair market value. (ii) read as follows: “For purposes of clause (i), any property described in clause (i)(I) acquired by the liquidating corporation during the 2-year period ending on the date of the adoption of the plan of complete liquidation shall, except as provided in regulations, be treated as part of a plan described in clause (i)(II).” Subsec. Stock considered to be owned by a person by reason of the application of the preceding sentence shall, for purposes of applying such sentence, be treated as actually owned by such person.

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