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Hello, it would depend if the S-Corp sold the assets to the 1065 entity, or if she distributed the vans to herself and them contributed them to the 1065. Which happened?
she changed all the titles to the 1065 basically. the tittle was never under her name at any point.
Ideally, the 1065 would pay the S-Corp FMV for the vans. The 1065 would then use that purchase price as the cost basis to depreciate and the 1120-S would report the sale on Form 4797. You could book a payable and receivable until the transaction is paid. If no consideration is given, since to a related party, the distribution would still be recorded as sold at FMV, but it may convolute the cost basis to the 1065. This is why I would prefer the former.
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