Instead, the distribution is governed by the general nonrecognition rule of Code § 311(a), which prevent the corporation from recognizing loss on a transfer of depreciated property. § 302(b)(1), this test is usually used only when the safe harbors of I.
Liquidation is a taxable event for both the shareholder and the corporation. Like the “Redemptions Not Equivalent to Dividends” test of I.
Such forward-looking statements reflect the Company’s current views with respect to future events, based on what the Company believes are reasonable assumptions; however, such statements are subject to certain risks and uncertainties.
Certain of these risks and uncertainties are described in greater detail in EMRISE’s filings with the Securities and Exchange Commission.
But that section only covers gain on distributions of appreciated property.
If the corporation distributes property that has depreciated (i.e., property with a built-in loss), Code § 311(b) does not apply.
As announced on May 12 of this year, EMRISE cannot determine at this time if it will be able to make another liquidation dividend distribution to its stockholders.