Tax and Non-Tax Aspects of LLC Liquidation

First Run Broadcast: November 3, 2009

1:00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00 a.m. P.T. (60 minutes)

Liquidation of Limited Liability Companies is seemingly a simple matter of filing the appropriate document and obtaining a “tax-free” distribution of property out of the LLC to its members.  However, LLC liquidations implicate an array of complex tax, financial and operational issues. What if the LLC liquidates “hot assets,” or property that was contributed with a built-in-gain?  What is the risk that a liquidating distribution will be considered a “disguised sale”?  What about creditor and other third party rights.  When does cancellation of indebtedness income arise and in what amount?  These and many other questions complicate the seemingly straightforward outcome of liquidating a LLC.  This program will provide you a practical guide to answering these questions in a real world transactional context.

• Tax and non-tax issues for the LLC and its members on liquidation
• Creditor and other third-party issues, including cancellation of indebtedness income
• Liquidation and distribution of “hot assets” and built-in gain property
• Disguised sale issues
• Special issues where LLCs focused on real estate
• Tax planning for valuable LLC attributes – NOLs, capital loss carryovers, tax credits

Grace Kim is a manager in Ernst & Young LLP’s Joint Venture and Partnership Tax Services, based in Washington, D.C.  Her practice focuses on the taxation of partnerships and joint ventures, including in the financial services, oil and gas, and real estate industries.  Before joining Ernst & Young, Ms. Kim practiced in the tax group of a national law firm where she specialized in matters involving partnerships, S corporations, and trusts and advised clients on the tax consequences of various facets of business transactions.  Prior to entering private practice, she served for eight years as an Assistant to the Branch Chief and for four years as an Attorney-Advisor in the Internal Revenue Service’s Chief Counsel office where she worked in the areas of partnerships, S corporations, and trusts.  Ms. Kim received her B.S., cum laude, in Foreign Service from Georgetown University, and a J.D. and an LL.M. from Georgetown University Law Center.