There are generally three categories of business that will liquidate assets: Liquidating retail inventory is challenging.
The entire or majority of the owner's lifetime savings may be tied up in the inventory, and converting this inventory to cash is critical to the owner's financial future.
The last substantial distribution can be used only if, at that time, the amount of the final distribution is both de minimis and determinable with “reasonable certainty.” (See in this regard Rev. Footnotes *Except in instances where the liquidation is governed by Section 332(a), and Section 337(a). But for many small business owners, liquidating assets is often the best or perhaps only feasible method of exiting their businesses, especially retail businesses.The reasons for this are numerous: Your heirs may want nothing to do with a takeover or succession plan.In that case, each distribution is allocated ratably among the several blocks. So, the ruling concludes that the dissolution and reincorporation did not result, respectively, in a distribution or transfer of the corporation’s properties.That’s done in the same proportion that the number of shares within a block bears to the total number of shares owned by the shareholder. In addition, the dissolution and reincorporation will not affect its shareholders’ bases and holding period in its stock.