Section I-1189 - Situs of stock canceled or redeemed in liquidation (Louisiana Administrative Code)

§ I-1189. Situs of Stock Canceled or Redeemed in Liquidation

A. General Rule. R.S. 47:287.747 provides that the situs of stock canceled or redeemed in the liquidation of a corporation, whether domestic or foreign, shall be in Louisiana in the same ratio that property located in Louisiana, and received by a shareholder, bears to the total property received in the liquidation. Property as used in R.S. 47:287.747 means all the assets of the liquidating corporation without regard to liabilities. For the purpose of determining the situs of the stock canceled or redeemed in liquidation, the fair market value of the property distributed in liquidation shall be used. The location of the property of the corporation shall be determined in accordance with the provisions of R.S. 47:287.93.

B. Example: X, shareholder, owns 10 percent of the shares of ABC, Inc., a foreign corporation. The basis of X's shares is $1,000. On July 1, 1986, ABC Inc., liquidates and exchanges the following property for its outstanding stock, which it cancels.

  

Total Assets (Fair Market Value)

Louisiana Assets (Fair Market Value)

Cash

$

10,000

$

2,000

Accounts receivable

  

50,000

  

8,000

Buildings

  

60,000

  

30,000

Land

  

60,000

  

10,000

Stocks

  

20,000

  

0

  

$

200,000

$

50,000

1. Since 1/4 of the assets distributed in liquidation are located in Louisiana, 1/4 of X's stock has its situs in Louisiana.

2. Gain is computed as follows.

Fair market value of property received

$

20,000

Basis of property received

  

1,000

Gain

$

19,000

Louisiana taxable gain (1/4 of $19,000)

$

4,750

(Promulgated by the Department of Revenue and Taxation, Income Tax Section, LR 14:109 (February 1988), repromulgated by the Department of Revenue, Policy Services Division, LR 30:486 (March 2004).)

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:287.747.

Disclaimer: This content is regularly reviewed to ensure the information is current and accurate. However, Section I-1189 Situs of stock canceled or redeemed in liquidation may have been updated since our last review. For the latest version of all legislation, please check the official resources.

Details
DISPOSITION
Standard
TITLE NUMBER
61
Table of content
Details
DISPOSITION
Standard
TITLE NUMBER
61
Table of content