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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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Tax state S-Corp, and I file Income Tax in NJ. Please advise

Customer Question

Tax for NY state S-Corp, and I file Income Tax in NJ.
Please advise for NJ & NY state tax and Federal tax,
on whether corporate tax reporting for S-Corp asset sales
and reflecting it into personal tax return that I prepared
are correct.
It's a small business (purchased on 2007) and I don't need to report Schedule L
but maintain for my own information:
Schedule L information before sales,
Equipment: 0 (21,725 - 21,725 deprecated)
GoodWill: 211,407 (No Amortization, acquired with business purchase)
Loan from Shareholder: 104,000
Other liabilities: 5,407
Capital Stock: 254,000
Ratained Earning: -152,000
Store was sold at 70,000 (30K for Equipment & 40K for Good will).
=== Corporate Return 1120S
* In Corporate Return, form 4797:
- Equipment Sale went to Part III
Line 20: 30,000
Line 21&22: 21,725
Line 23: 0 (Ingored sale cost for now)
Line 24: 30,000
Line 25 a&b: 21,725
Line 30: 30,000
Line 31: 21,725
Line 32: 8,275
- Goodwill Sale went to Part I
Line 2 d: 40,000 e: 0 f: 211,407 g: -171,407
Line 6: 8275 from Part III
Line 7: -163,13240000
Line 13&17: 21,725
- Loss from Business (other than asset sales) for 2015: -1,000
* Schedule K-1 (from 1120S)
Line 1 (Ordinary Income): 20,725 (21,725 - 1,000)
Line 9 (Net section 1231 gain/loss): -163,132
=== Personal 1040
- Schedule E part II
Line A(j), D(j), Line 30, 32 & 41: 20,725 (from K-1 Line 1)
=> This went to 1040 Line 17
- Form 4797
Line 2(g), 7, 11, 17 & 18b: -163,132 (from K-1 Line 9)
=> This went to 1040 Line 14
=========== Questions
1. Could you verify whether the way I handled asset sales
in Corporate & Personal report is correct?
2. My ex-accountant did not amortize goodwill, is it correct
to calculate loss with 0 amorization?
3. As you can see, stock value is 254K. But, if I add this year's
loss (+20725 - 163,132 = -142,407), retained earning
will become larger than stock value
(-152,000 - 142,407 = -294407) as shown below.
How do I handle this?
- Schedule L after sales:
Equipment: 0
GoodWill: 0
Loan from Shareholder: 34,000 (70K repaid with sales proceed)
Other liabilities: 5,407
Capital Stock: 254,000
Ratained Earning: -294,407
4. In connection to item 3 above, there's 34K loan from shareholder
and retained earning larger than stock value.
How do I report Corporate Liquidation/Disolve
in personal return?
1. Stock liquidation
2. Loss from Loan which cannot be repaid by Corporation.
5. This large loss from K-1 creates Net-Operating-Loss in personal return.
Is there any way to re-direct goodwill loss from
asset sales to Capital Loss so I can carry all (except -3K) over
instead of offsetting this year's other personal income?
I know I can carry NOL back or forward, but would like to
know whether I can make asset sales loss capital loss.
Submitted: 1 year ago.
Category: Tax
Expert:  PDtax replied 1 year ago.

Hi from just answer. I'm PDtax. I can assist.

This is very hard to work with, and the amount offered life for the number of issues.

I'll post an offer of premium service for an hour professional time. Accept, and I can work with you privately through a special link.

Customer: replied 1 year ago.
I doubt that my questions are so complex and requires such service that you propose. You can either answer or tell JustAnswer you're not taking my question.
Expert:  Lane replied 1 year ago.

Oh sorry ... I clicked on this by mistake. When the previous expert opts out the question pops back out the the question list.

...

I would however concur. This is FAR underpriced ... you've essentially asked for the tax return (the only complex or in doubt portions) to be done for you. My firm does not do returns for less than $500, and when several schedules or 1120-S AND personal are affect much more.

...

I'd advise that you up your offer here, or you may get the quality that's commensurate with whhat you've offered here.

...

I'll opt out now

Customer: replied 1 year ago.
I'm not asking you to prepare my return. I prepared the return as I listed in the question, you can review, and advise on other questions. If you don't like the price, you shouldn't have taken this answer and you should say so to JustAnswer. Do not waste my time. Either you reject JustAnswer's price or I inform JustAnswer what happened, review this Q&A and get someone else. That sounds fair to me. I would appreciate your update on what you want to do with this question.