If you sold the shares in the C corporation, what you can do with its assets from the time you signed the agreement to the actual date of transfer should be governed by the covenants of your sale agreement. Most such agreements prevent the current owners from doing anything that would put the C corporation into jeopardy (i.e. such as removing all cash from the corporation bank account). I recommend you review your agreement with your attorney to ascertain what it allows you to do in terms of what you may pay yourself from the corporation or what assets you may remove.
If you just sold business assets (i.e. not the shares of the corporation) then you may only look to the remaining corporate assets for recovery of your investments.
When you initially put down the deposits at the start you should have recorded those payments as either capital contributions or as a loan from you to the corporation.
The bottom line is you what you may be repaid by the C corporation depends on the way you sold the busines. I recommend that you engage a qualified CPA to review this with you. If you can properly document all of these expenditures you may be entitled to reduce the taxable gain you have to recognize for tax purposes.
Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.
Assuming you only sold business assets then you still own your corporation. The money you paid for items on behalf of the corporation constitutes either a capital contribution by you or a loan to the corporation. Whether the items for which you paid are deductible by the corporation depends on the nature of the expenditure.
First, the sale of the business assets by the corporation stands on its own. This means the corporation has to report the net gain from the sale of the assets (i.e. gain equals sales price less selling expenses less cost basis of assets sold). Depending on the nature of the assets sold a portion of the gain will likely be treated as ordinary income and there may also be depreciation recapture.
Second, the deposits you paid on behalf of the corporation should be recoverable once you cease operations. If they are not recoverable then the corporation may deduct them as an expense at the time you determine they will not be collected.
Third, if the loan from the previous owner was for your purchase of the business, then it is part of your cost basis in whatever was purchased from the owner. If you purchased the corporate shares then the loan constitutes cost basis in your corporate shares. Accordingly, in this scenario the loan amount would not reduce your corporation's gain from the sale of the business assets.
If the loan was for the purchase of assets which you then transferred into your corporation, then then loan amount should be allocated among the contributed assets as cost basis which would reduce gain on their sale by the corporation.
If the loan was from the previous owner to the corporation, then the loan amount should be additional cost basis for whatever assets it was used to purchase, thus reducing any gain realized by the corporation on the sale of those assets.
Interest paid on the loan by you individually would be deductible as investment interest.
CPA/CFP/PFS
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