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CGCPA
CGCPA, CPA
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Experience:  over 40 years experience in tax matters
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I had a leaning business grossing about 40 grand a year. I

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I had a leaning business grossing about 40 grand a year. I have a company van purchased and paid for by company money. It is ten years old and not worth much, but since I am going out of business now it is a problem. The business is a general partnership 80/20%.
How can I keep the van and dissolve the business?
Submitted: 5 months ago.
Category: Tax
Expert:  CGCPA replied 5 months ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

 

Dissolving the partnership is itself a simple matter. It involves filing final partnership returns and submitting a dissolution of partnership form to the government entity with which the partnership was initially registered.The CPA preparing the final tax returns can handle all this.

 

The van is only slightly more complex. The partnership will need to "sell" the van to you for its fair market value. This does not mean that money will actually change hands, only that it will be a surrendering of your partnership interest. It is needed because you will need to register the van in your own name. You can determine this value at www.kbb.com If you own the 80% of the partnership, your partner is entitled to his/her 20%, Your state will also charge you sales tax so be sure to take a few pictures of the van when you go to register it. They will help substantiate the value.

Customer: replied 5 months ago.

Because when I bought and registered the van I was operating as a sole proprietor, the van is reg in my name. It is insured by the business.


 


I just added a partner this year so we haven't had to file for the pass through entity for tax purpose. I got a new E.I.N. That's it. The partner has no interest in the van but, I understand, is legally entitled to 20% of everything.


 


I don't believe the DMV will allow me to sell it to myself. Is there another form I can use to record the value of the van? When I file my taxes, I believe, I will have to claim it as income.


 


 

Expert:  CGCPA replied 5 months ago.
If the van is registered and titled to you and is fully depreciated by the business there is nothing further for you to do there. The only item will be the partnership dissolution or the cancellation of a DBA if the partnership has not been formed through legal channels. There will be no income to you from this.
CGCPA, CPA
Category: Tax
Satisfied Customers: 3733
Experience: over 40 years experience in tax matters
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