Two years ago, Lodi Inc.'s shareholders voted to dissolve the corporation. Pursuant to the dissolution, Lodi sold

Question:

Two years ago, Lodi Inc.'s shareholders voted to dissolve the corporation. Pursuant to the dissolution, Lodi sold all its assets, paid off its outstanding debts, and distributed $789,000 remaining cash to its shareholders in complete of their equity. This year, the IRS determined that Lodi underpaid its corporate income tax for its last three years. The tax deficiency totaled $1.4 million.
a. To what extent can the IRS collect the deficiency from the former Lodi shareholders?
b. MN was a 5 percent Lodi shareholder. How much tax can the IRS collect from MN
Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...