Originally Posted by dprof
The final return of a C corporation was filed in December, 2010. In 2013 a settlement check was issued to the corporation for a lawsuit filed in 2007 that was written off as a bad debt. How is this settlement check to be reported to the IRS with the corporation no longer operating.
Dissolving a corporation does not get you out of taxes that were due from the corporation, you would still owe those. Tax filing requirements for a dissolved company include but aren’t limited only to a final income tax return.As your biz deducted the loss as bad debt on its 2010 return, you need to report it on the biz 2013 return as reportable income; as a corporation for tax purposes, you must file a corporate tax return each year, regardless of whether the business is active or inactive. The IRS requires you to report the inactivity on Form 1120 and file it no later than the fifteenth day in the third month after the close of the corp’s tax year.
I would encourage you to find a local cpa/irsea, and have them work the numbers for you.