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Filling out IRS Form 966 (Rev. October 2016) for corporate dissolution or liquidation can be straightforward with the right guidance. Our platform simplifies this process, allowing you to complete and manage your forms efficiently.

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  1. Begin by signing up or logging into our editor. This will give you access to a variety of forms, including Form 966.
  2. Click ‘Get Form’ to open Form 966 in the editor. You’ll see all necessary fields ready for input.
  3. Fill in the corporation's name and employer identification number at the top of the form. Ensure accuracy as this information is crucial.
  4. Complete sections regarding incorporation details, including date and place of incorporation, and check the type of return being filed.
  5. Indicate the type of liquidation planned and provide details about any amendments to the plan if applicable.
  6. Sign and date the form at the bottom, ensuring it is signed by an authorized corporate officer.
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File Schedule C (Form 1040 or Form 1040-SR), Profit or Loss From Business, with your individual tax return for the year you close your business.
The primary purpose of Form 966 is to provide the IRS with information about the corporation or LLC that intends to dissolve or liquidate. It notifies the IRS that a corporation or LLC is in the process of dissolving or liquidating its business and allows the IRS to identify the final tax return. The Essential Guide for Form 966 for Corporate Dissolution or Liquidation optictax.com form-966 optictax.com form-966
Generally, a California resident with a single-member LLC does not need to file Form 966 for dissolution, as long as the LLC was never taxed as a C corporation.
If Form 966 is not filed within 30 days after the adoption of a resolution or plan to dissolve or liquidate, the IRS may impose penalties for late filing. The penalty amount may vary depending on the size of the corporation or LLC.
There is no direct Form 966 penalty for non-filing or late filing, but by not properly notifying the IRS of a dissolution or liquidation, it may result in collateral damage and other penalties.
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File Form 966 within 30 days after the resolution or plan is adopted to dissolve the corporation or liquidate any of its stock. If the resolution or plan is amended or supplemented after Form 966 is filed, file another Form 966 within 30 days after the amendment or supplement is adopted.
Purpose of Form 966 IRS notification: By filing Form 966, the corporation notifies the IRS of its intention to dissolve or liquidate. This enables the IRS to update its records and ensure compliance with tax regulations. **Tax clearance: **Filing Form 966 helps the corporation obtain tax clearance from the IRS.
If the fair market value exceeds the basis, the shareholder recognizes a capital gain. If it is less, the shareholder recognizes a capital loss. Shareholders must report these gains or losses on their tax returns, typically using Schedule D (Capital Gains and Losses).
A corporation (or a farmers cooperative) must file Form 966 if it adopts a resolution or plan to dissolve the corporation or liquidate any of its stock. Exempt organizations and qualified subchapter S subsidiaries should not file Form 966.

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