Is Goodwill 'Property' Distributable in Liquidation of Corporation

CC:I:I-539 Date: February 8, 1963 M:MFF/C:HGG Memorandum to: Harold T. Swartz Assistant Commissioner (Technical) Attention: Director, Tax Rulings Division Your memorandum (T:R:R-HFM) dated April 24, 1962, referred to this office a proposed technical advice memorandum in the above-named case for concurrence or comment. The question presented is: Where a corporation is found to have goodwill, is such goodwill "property" distributed in a complete liquidation of the corporation under section 333 where the shareholders continue as a partnership the business of the corporation, and upon distribution is the goodwill subject to the rules provided by section 334(c) governing allocation of basis? We are in agreement with your affirmative answers to both segments of this question. We suggest, however, in the paragraphs that follow, a slightly different approach to the one you have taken in the memorandum of technical advice. The pertinent facts are as follows: * * * an accrual basis * * * corpora...