Monday, November 13, 2006

Tax Notes-- Indiana Liquidating Limited Liability Corporations

The Indiana Department of Revenue ruled on July 24th. that a liquidating limited liability corporation formed to liquidate corporate assets in compliance with a court ordered bankruptcy plan, was required to file an Indiana partnership return, but not required to withhold personal income tax withholding from its partners because it had no Indiana sourced income. The LLLC was treated as a partnership for federal income tax purposes with its “partners” being the creditors of the bankrupted corporation. (See Indiana Revenue Ruling IT-06-03)

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