A seller needs to determine is whether to sell stock or assets.
Forming a C corporation was once the only way the owner of a small business could shield himself from the debts and liabilities of the company.
Where the consequences might vary with multiple owners, we will hope to point that out.
While most publicly traded entities are C corporations (a few are partnerships or trusts), fewer and fewer small businesses operate as C corporations.
For example, suppose your distribution includes ,000 in cash and a company vehicle worth ,000 for which the corporation still owes ,000.
In this situation, you calculate your gain or loss using ,000 as the gross proceeds -- the cash plus the car's value minus the outstanding debt on the car.
Sales of stocks produce either a capital loss or gain.