Cash Liquidation Distribution

AAA

DEFINITION of 'Cash Liquidation Distribution'

The amount of capital that is returned to the investor or business owner when a business is liquidated. Cash liquidation distributions are usually considered a nontaxable return of principal. Credit unions send this sort of distribution to their depositors when they are liquidated as well.

INVESTOPEDIA EXPLAINS 'Cash Liquidation Distribution'

Proceeds from cash liquidation distributions are reported on Form 1099-DIV. However, only the amount of distribution that is in excess of the recipient's original investment is taxable. The gain is then reported on schedule D.

RELATED TERMS
  1. Liquidation Value

    The total worth of a company's physical assets when it goes out ...
  2. Cash Concentration And Disbursement ...

    A type of electronic payment used to transfer funds between remote ...
  3. Cash

    Legal tender or coins that can be used in exchange goods, debt, ...
  4. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
  5. Distribution

    1. When trading volume is higher than that of the previous day ...
  6. Service Mark

    A brand name or logo that identifies the provider of a service. ...
Related Articles
  1. Investing Basics

    Digging Into Book Value

  2. Options & Futures

    Find Investment Quality In The Income ...

  3. Bonds & Fixed Income

    Distressed Debt An Avenue To Profit ...

  4. Options & Futures

    Bank Failure: Will Your Assets Be Protected?

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center