A cash liquidating distribution are funds distributed to a shareholder when a corporation is partially or fully liquidated. The distribution represents a return of an investor’s capital, so it’s not taxable to the extent of basis in the stock. If the distribution exceeds basis, it is a capital gain (long-term or short-term depending upon how long the stock has been held).
A business method of accounting requiring income to be reported when earned and expenses to be deducted when incurred. However, deductions generally may not be claimed until economic performance has occurred.