[Verse 1] When a company decides to close its doors Section three three one tells us what's in store Shareholders get cash or property in hand Treat it like a sale across the land Take your basis out, the rest is gain Capital treatment, that's the refrain [Chorus] Three three one for shareholders, gain or loss Three three six, the corp pays the cost Three three two and seven, eighty percent Subsidiary liquidation, tax event prevented Five complete ways liquidation plays Know the rules for corporate ending days [Verse 2] Three three six says the corporation Must recognize gains across the nation When assets go out at fair market price Versus basis, roll the tax dice Losses too get recognized Unless exceptions are applied [Chorus] Three three one for shareholders, gain or loss Three three six, the corp pays the cost Three three two and seven, eighty percent Subsidiary liquidation, tax event prevented Five complete ways liquidation plays Know the rules for corporate ending days [Verse 3] Eighty percent or more ownership stake Three three two makes the earth shake Parent gets the assets, no gain to see Three three seven keeps the corp tax free Subsidiary melts into the parent's frame Tax-free liquidation is the name of the game [Bridge] But watch out for the reincorporation trick Courts will catch it, make the taxes stick Liquidate and then reform too soon They'll collapse it under common tune Substance over form will always win Don't let form games make your head spin [Chorus] Three three one for shareholders, gain or loss Three three six, the corp pays the cost Three three two and seven, eighty percent Subsidiary liquidation, tax event prevented Five complete ways liquidation plays Know the rules for corporate ending days [Outro] Complete liquidations, five rules to know Tax consequences, watch the money flow From shareholder pockets to corporate halls Remember these sections when liquidation calls
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