Liquidating an llc

Most states charge a small fee for filing the form—check the form instructions for the amount.

When you send in your dissolution form to the state, include a cover letter with your business name and corporation or LLC number as well as your name, return address, and telephone number. To be safe, send the form by certified mail, with return receipt requested.

As stated in Taxation of Limited Liability Companies and Partnerships, limited liability companies are taxed as partnerships by default.

This discussion of the tax consequences of contributions to partnerships will also apply to limited liability companies unless the limited liability company has elected to be taxed as a corporation.

A fine line exists between definitions of a corporate liquidation and dissolution.

But for tax purposes, the defining line can make a big difference.

While an LLC may be involuntarily dissolved through a court decree, this article covers voluntary dissolution by the LLC members.

The partner’s basis in his partnership interest in increased by: These basis adjustments depend in large part on the allocation of partnership income, gains, losses, deductions, and credit among the partners.It will be called a certificate of dissolution, certificate of cancellation, articles of dissolution, or something similar.Typically, the form merely asks for information that identifies you and your corporation, but some states also ask whether all debts and liabilities have been paid (or assumed by another company or provided for in a bank or escrow account) and whether the remaining assets, if any, were distributed.Witness the situation described in recent letter from the Internal Revenue Service (LTR 200806006, November 7, 2007), which addresses a seeming anomaly related to the tax code.The anomaly is corporate dissolution without liquidation.

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