Cash Liquidation Distribution

We’ve all seen those signs: going out of business, liquidation sale, etc. When a business liquidates, the cash liquidation distribution is what’s left after everything has gone to the business owner or investors.

The word “liquidation” means that assets are liquified into cash, which returns back to the circle-of-life that is the economy. With a cash liquidation distribution, the cash is given to whoever is owed debts by the business first, and the business owner gets what’s left (which is unfortunately taxable). Talk about a bad day.