liquidating dividend

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Liquidating dividend

Payment by a firm to its owners from capital rather than from earnings.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Liquidating Dividend

A dividend paid to shareholders out of a company's capital or assets, rather than its earned income. That is, a liquidating dividend occurs when a company pays more than its total profit in dividends. This usually happens when shareholders believe that the company is no longer sustainable or profitable. Therefore, liquidating dividends are considered a return of shareholders' investments, rather than profit on them. All of the firm's debts must be paid before it can pay liquidating dividends. See also: Final dividend.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

liquidating dividend

A pro rata distribution of cash or property to stockholders as part of the dissolution of a business. For example, a firm may be liquidated because the officers believe its stock price does not adequately reflect the value of its assets. All debts and other obligations usually must be satisfied before issuance of a final liquidating dividend. A stock paying a liquidating dividend is indicated in stock transaction tables in newspapers by the symbol C, next to the dividend column. See also final dividend, General Utilities Doctrine.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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The developer of the iconic leisure and tourist destinations like City of Dreams Manila and Tagaytay Highland paid the tax in protest arising from the transfer of Belle Bay City Corporation (BBCC) of its remaining assets to its sister company consisting of parcel of reclaimed lands in Paranaque City by way of liquidating dividends.
An expanded version of the same can also be found in Section 8 of Revenue Regulations 6-2008 whereby it is clarified that the capital gain or loss derived by stockholders in receiving liquidating dividends are subject to regular income-tax rates.
In view of the various justifications to exempt the liquidating dividends from tax on the part of the liquidating corporation, the CTA En Banc made a clear stand that the basis for liquidating dividends as not subject to tax is not because of the absence of income from or the absence of sale, disposition or conveyance of real property.
At the CTA division level, however, the Court clarified that mere distribution of liquidating dividend on account of the dissolution of a corporation is not to be treated as sale for purposes of the imposition of capital gains tax.
[section]738.401(2), assuming none of the dividends are redemption or liquidating dividends.
(8) Assumes that the dividends in Example 4b are not redemption or liquidating dividends. See Fla.
On their 1989 returns, MSSTA reported a $300,000 sale of its assets and T reported no liquidating dividends.
In effect, the Court found that GAAR will be invoked where a tax avoidance arrangement is designed to circumvent the provisions of the Act which would treat liquidating dividends to shareholders as taxable dividends.
The Appellants had only to determine whether or not such a disassociation would occur by the payment of a liquidating dividend by BCo or the sale by the Appellants of their respective shareholdings in BCo.
* Income from receiverships (liquidating dividends and payments on claims) to the extent such funds are not required by REFCO or the Financing Corporation (FICO).