Common use of Timing of the liquidation Clause in Contracts

Timing of the liquidation. (1) In general. Except as otherwise provided in paragraph (b)(3) or (4) of this sec- tion, the liquidation described in para- graph (a)(2) of this section occurs at the close of the day before the QSub election is effective. Thus, for example, if a C corporation elects to be treated as an S corporation and makes a QSub election (effective the same date as the S election) with respect to a sub- sidiary, the liquidation occurs imme- diately before the S election becomes effective, while the S electing parent is still a C corporation.