Define liquidating

The orderly liquidation value (OLV) is typically included in an appraisal of hard tangible assets (i.e., equipment).It is an estimate of the gross amount that the tangible assets would fetch in an auction-style liquidation with the seller needing to sell the assets on an "as-is, where-is" basis.Use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose.For more information about the tax on unearned income of children and the parents' election, see chapter 31. Dividends and other distributions you receive as a beneficiary of an estate or trust are generally taxable income.Other times, partnerships go bankrupt and are forced to liquidate in order to pay off their creditors.

They do this to justify the net tangible asset backing for the purchase price and hopefully reduce the amount of goodwill being paid.The partnership liquidation process starts with the partnership selling off all of its noncash assets at auction.Most of the time these assets will create a loss because they will be sold for less than what the partnership purchased them for, but some assets, like building, can appreciate and be sold at a gain.It is higher than the OLV because it assumes that a transaction would occur willingly between the buyer and seller, without the seller being obligated to transact.It also assumes that sufficient (rather than reasonable) time would be allowed to find all buyers available.

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