LIQUIDATING DIVIDENDS Definition

LIQUIDATING DIVIDENDS are dividends paid by a corporation that is in the process of liquidation/bankruptcy. Liquidating Dividends are paid from the capital of the corporation as opposed to earnings. Recipients of Liquidating Dividends are typically shareholders, bond holders and/or creditors. In the U.S. such dividends are generally nontaxable under the Internal Revenue Code.

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DEVALUATION, in economics, is the lowering in value of one currency in relation to other currencies.

ADJUSTMENTS TO INCOME are all tax code allowable increases/(deductions) to income that are not already accounted for.

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