Liquidating sale california
Newco retained Lessor's tax-paid status in the property under the last paragraph of subdivision (b)(1)(E) of Regulation 1660 because Lessor transferred all its tangible personal property and the ultimate ownership of the property was unchanged.Since Newco's only activity was the lease of tax-paid property, it was not required to hold a seller's permit.Therefore, since it made no other sales of property, its sale of the leased equipment also qualified as an exempt occasional sale. An asset sale is structured such that the seller creates a new limited liability company (LLC) and transfers the assets into the commencing entity in exchange for an interest in the LLC that is concurrently transferred to the purchaser for cash.The sale is contingent on the finalization and concurrent closing of several transaction documents relating to various aspects of the business operations, e.g., a Supply Agreement, a Services Agreement, an Employee Benefits Agreement, etc.We maintain an experienced staff at our facilities in Fort Lauderdale, Florida, Newport Beach, California, Cleveland, Ohio and Annapolis, Maryland.Through our weekly boat and yacht auctions, we liquidate this marine inventory using a bid system, (see Bidding for more details).The equipment was transferred subject to the ongoing leases to Parent.
Thus, if the ownership transfer occurs in California, B will owe use tax measured by its purchase price of the property.Parent contributed the stock of Lessor to Newco and Lessor thereby became a wholly owned subsidiary of Newco.Lessor subsequently distributed the equipment it leased, which represented 100 percent of its tangible personal property, to Newco as a dividend in kind.Since the transaction is neither a "sale" nor a "purchase," the transfer of equipment by B to the joint venture corporation solely in exchange for capital stock would be a nontaxable transfer. It is possible that B could have a California use tax liability with respect to the equipment in question.B would be regarded as having purchased the equipment for use in this state and as having used the equipment in this state if title to the equipment were to pass from B to the joint venture corporation in this state.