Liquidating real

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Those "75% off or more" discounts that you are imagining won't arrive until the final week of the liquidation sale -- a time when anything you would really want will already be long gone. There are limited forms of payment: The way you can pay for merchandise at a liquidation sale can be limited.

If you still feel you must go to the liquidation sale because you are sure prices will be good, do your homework. Checks, coupons and gift cards probably won't be accepted.

The shareholder’s basis is decreased (but not below zero) by the shareholder’s share of the S corporation’s items of loss and deduction, nondeductible expenses (except expenses that are not chargeable to the capital account), depletion deduction for oil and gas property, and distributions to the shareholder that are not made from accumulated earnings and profits.

This helps ensure that the shareholder only benefits once from reductions in income earned by the S corporation.

Basically, there will be no service of any kind, so unless you know exactly what you want, liquidation sales are not the place to try and find something.

Like C corporations, S corporations do not recognize any gain or loss on a distribution of cash to its shareholders.

If the S corporation distributes appreciated property to a shareholder, the corporation must recognize gain as if the property were sold to the shareholder at fair market value.

The prices aren't that good: When people hear the words "liquidation sale," they assume the main purpose is to get rid of merchandise quickly, meaning cheaply.

While moving the inventory is one goal, it's not the primary goal. Since "liquidation sales" usually last several months -- Circuit City's will last till the end of March -- there is no incentive to slash prices from the outset.

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