I have a C corporation in chapter 11 bankruptcy and will cease to exist as a business after the bankruptcy. There are stockholders, note holders and bond holders. Each of these will be paid off with the sale proceeds.
My question is this: Will I issue form 1099B to the stockholders when their shares are bought back by the company? Will I issue the note and bond holders form 1099 INT for the interest they will be paid on their principal amounts?
Thank you so much for the clarifying what I was thinking. I called the IRS three times and was told "no but not sure" on the 1099Bs. Didn't seem right. Thanks again.
If truly is liquidation then you report as 1099-DIV and report it as a liquidating dividend. I in Chapter 11 I would think the trustee would be reponsible for most of this. 1099-INTs should always be done.
Thanks for the insight. You aren't missing anything. I am just doubling checking on what needs to be done at year end. Too many times I have expected something to be done by someone else and it isn't.
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