Pro rata liquidating distribution

If the insured only requires the policy for 270 days, then the company must reduce the premium accordingly.

The pro rata premium due for this period is (

If the insured only requires the policy for 270 days, then the company must reduce the premium accordingly.The pro rata premium due for this period is ($1,000/365) x 270 = $739.73.

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If the insured only requires the policy for 270 days, then the company must reduce the premium accordingly.

The pro rata premium due for this period is ($1,000/365) x 270 = $739.73.

This makes sense because he owns half the shares and receives half the total dividends.

The remaining shareholders get $50, $30 and $20 respectively.

Practitioners often construe this requirement to be more restrictive than it really is, believing that a single disproportionate distribution will be an indication that you have more than one class of stock, and — Voila! Applying these concepts to our fact pattern above, if the S corporation makes a disproportionate distribution to A and B, the IRS would look to Treas. Section 1.1361-1(l)(2)(i) for guidance on whether the disproportionate distribution is indicative of multiple classes of stock.

,000/365) x 270 = 9.73.

This makes sense because he owns half the shares and receives half the total dividends.

The remaining shareholders get , and respectively.

Practitioners often construe this requirement to be more restrictive than it really is, believing that a single disproportionate distribution will be an indication that you have more than one class of stock, and — Voila! Applying these concepts to our fact pattern above, if the S corporation makes a disproportionate distribution to A and B, the IRS would look to Treas. Section 1.1361-1(l)(2)(i) for guidance on whether the disproportionate distribution is indicative of multiple classes of stock.

In short, S corporations have more flexibility than you realize to make distributions that are not perfectly pro-rata to its shareholders. Relevant Law: The genesis of the confusion is found in Section 1361(b)(1)(D), which provides that in order for a corporation to be eligible to make an S election, the corporation can only have one class of stock outstanding. As you can see, there is no prohibition on an S corporation having voting and nonvoting stock; rather, it simply can’t have shares of stock that offer the holders different rights to distribution or liquidation proceeds. Here’s the thing; there’s nothing in the statute or regulations that says you can’t make a disproportionate distribution; it simply says that the underlying stock can’t confer upon the shareholders different to distributions.Assume there are only four shareholders holding 50, 25, 15 and 10 shares.The amount due to each shareholder is his pro rata share.The amount of interest earned in two months on an investment that yields 10% interest each year is (10%/12) x 2 = 1.67%.When it comes to bonds, payment on accrued interest is calculated on a pro rata basis.

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