Instead of a distribution from retained earnings, stockholders receive a return of capital.
Also a distribution of assets from a company that is going out of business.
Partners, however, can only take a loss on their returns if it's solely the result of a liquidating distribution of cash, outstanding partnership receivables or inventory items.
If the partnership distributes property -- anything other than cash and property treated as cash -- during its liquidation, it has no immediate tax effect.
A liquidating dividend may be made in one or more installments.
In the United States a corporation paying out liquidating dividends will issue a Form 1099-DIV to all of its shareholders that details the amount of the distribution.
A liquidating dividend is also called liquidating distribution.Your basis increases and decreases over the years for required adjustments to arrive at adjusted basis -- the amount you'll use to calculate gain or loss after the liquidation.For example, increasing adjustments are made for additional contributions you make and to reflect your share of partnership income, whereas decreasing adjustments are required for partnership losses and profit withdrawals.Essentially, a person who owns the security on the ex-dividend date will receive the distribution, regardless of who currently holds the stock.The ex-dividend date is typically set for two business days prior to the record date.