Cash Liquidation Distribution


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.

BREAKING DOWN '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.

  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. Distribution

    1. When trading volume is higher than that of the previous day ...
  5. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
  6. Liquidity

    The degree to which an asset or security can be quickly bought ...
Related Articles
  1. Investing Basics

    Digging Into Book Value

    This calculation will serve up your portion of the shareholder pie.
  2. Options & Futures

    Find Investment Quality In The Income Statement

    Use these key attributes to uncover top-level investments.
  3. Bonds & Fixed Income

    Distressed Debt An Avenue To Profit In Corporate Bankruptcy

    Use debt securities to attack bankrupt companies and scavenge them for profits.
  4. Options & Futures

    Bank Failure: Will Your Assets Be Protected?

    The SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.
  5. Term

    What's a Sector?

    The term sector has several applications in economics and finance.
  6. Economics

    What are Acquisition Costs?

    A company can recognize acquisition costs as those costs used to buy property and equipment.
  7. Investing Basics

    What Does In Specie Mean?

    In specie describes the distribution of an asset in its physical form instead of cash.
  8. Economics

    Understanding Production Efficiency

    Production efficiency is the point at which an economy cannot increase output of a good or service without lowering the production of another product.
  9. Economics

    Understanding Bad Debt

    Bad debt is money a company or lender is owed, but is unable to collect.
  10. Economics

    Explaining Synergy

    Synergy is the concept of combining two or more entities to create something greater than either entity on its own.
  1. What does it mean when the shares in my account have been liquidated?

    An account liquidation occurs when the holdings of an account are sold off by the firm in which the account was created. ... Read Full Answer >>
  2. Since stockholders are entitled to a company's assets and earnings, can a stockholder ...

    When buying stock in a company, an investor becomes a part owner of that company. In addition to possessing the small degree ... Read Full Answer >>
  3. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  4. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  5. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  6. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!