LIQUIDATING DIVIDEND
A corporation will pay its shareholders from its capital base during the firm’s partial or full liquidation. Normally, these are not taxable for shareholders. Liquidating dividend is different from regular dividends; the latter gets it from operating profits or retained earnings. This is done when a company declares bankruptcy or it ceases all its business operations. Then, the proceeds are given to the company’s shareholders.
Also known as liquidating distribution.
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Original Cost
It simply refers to the total cost associated in buying an asset.
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