Distributions by Licensee—permitted “tax Distributions” to private investors and SBA.

CFR · 2024-01-01 · US · Title 13

If you have outstanding Participating Securities or Earmarked Assets, and you are a limited partnership, “S Corporation,” or equivalent pass-through entity for tax purposes, you may make “tax Distributions” to your investors in accordance with this § 107.1550, whether or not they have an actual tax liability. SBA receives a share of any tax Distribution you make. This section tells you when you may make a “tax Distribution” and how to compute it. You must notify SBA of any planned distribution under this section 10 business days before the distribution date, unless SBA permits otherwise. (a) (1) You have paid all your Prioritized Payments, Adjustments, and Charges, so that the balance in both your Distribution Account and your Accumulation Account is zero (see § 107.1520). (2) You satisfy the liquidity requirement in § 107.1505. (3) The tax Distribution does not exceed your Retained Earnings Available for Distribution. (4) The tax Distribution does not exceed the Maximum Tax Liability from paragraph (b) of this section. (b) (2) You may compute the highest combined marginal Federal and State income tax rate on ordinary income and capital gains using either individual or corporate rates. However, you must apply the same type of rate, either individual or corporate, to both ordinary income and capital gains. (3) In determining the combined Federal and State income tax rate, you must assume that State income taxes are deductible from Federal income taxes. For example, if the Fede

official document · source cfr-2024 · id 13:§ 107.1550