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For a C Corporation that issued suppose $100 of shares on incorporation, the shareholders contributed cash. The company dissolved and did not have funds to repay shareholders. For an 1120, is the fact shares are now worth $0 reported somewhere on dissolution?
The irs.gov notes to use Schedule D to report Capital Gain and Loss which would be for capital assets. Where would Initial $100 of Shares issued to investors, now worth $0 be listed for 1120?
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It sounds like the 1099-DIV will show $0 for the Liquidation Distributions.
On the 1040, the taxpayer will report of the sale of some stock on 8949/Schedule D, with a selling price of $0 and a purchase price of $100.
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If I am reading your answer correctly, the shareholder "person" would use 1040 and 8949 Capital Gain and Loss on their personal return and not the C Corporation attaching 8949 to the 1120?
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Correct.
