Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 12-28-2010, 06:00 PM
Junior Member
 
Join Date: Dec 2010
Posts: 1
closing s corp, sale of equip

closing s corp, shareholders only husband and wife. Business loss.
after closing, is there any tax liability on sale of equipment?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 01-01-2011, 04:24 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
“Business loss. after closing, is there any tax liability on sale of equipment?”------>I feel sorry for that. I guess a variety of legal and accounting issues occur when an S-corp election is terminated. Cash ( if you have) plus FMV of the equipment is the amount of distribution to employees shareholders. In general, the FMV must be lower than the original cost of the equipment, no gain is recognized. The corp will do a liquidation. If the only remaining asset is the equipment, it will be distributed to the shareholder as it ‘d be sold for its fair market value and then the cash ‘d be distributed. There will not be anything on the K-1 that is specific to the negative retained earnings. However, the sale of the equipment should be included and the gain or loss on that transaction will be included on the K-1 as well. If you have income from the corporation in the tax year, your K-1 would reflect that income and you would use this form to prepare your personal tax return.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply



Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Do I still pay salary when closing S-Corp in NJ c1991sc S-Corporation 1 12-16-2010 10:13 PM
Dissolving/Closing S-corp with an A/P balance taxinputs87 S-Corporation 0 08-30-2010 11:33 PM
Depreciation of Equip for small Business Transland Sole-Proprietorship 0 03-13-2010 03:41 AM
Closing S Corp & Form 966 TaxTacks S-Corporation 1 03-08-2010 10:54 PM
closing s corp cbj55 S-Corporation 2 03-04-2009 10:02 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.