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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6181
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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Trying to close an s corp :-) stuck on the Capital Stock

Customer Question

Trying to close an s corp :-)
JA: Thanks. Can you give me any more details about your issue?
Customer: stuck on the Capital Stock ($6,000) and Retained Earnings Liquidating distribution where do you show that when zero out Balance Sheet
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Submitted: 9 months ago.
Category: Tax
Customer: replied 9 months ago.
I handled the top half of Balance Sheet although one of the assets was capital in an LLC which was transferred to the member on 1/1/16. Just want to make sure I handle the Retained Earnings (matches the balance of the AAA Account) and Capital Stock correctly.
Expert:  Stephen G. replied 9 months ago.

OK, evidently "EZCPA" isn't available as your question was return to the general "Que".

What is it that you are having a problem with exactly?

Are you trying to make a journal entry?

Is there anything left to distribute?

If not you would just Debit Capital Stock & Credit Retained Earnings to clear out those accounts. If they are both credit balances, then there should be something else to deal with also.

The ending balance sheet on the tax return will be blank, if you've closed out the S-Corp.

Customer: replied 9 months ago.
Sorry if I wasn't clear. Yes, I understand and agree that the ending balance sheet will be zeros. Just trying to better understand the gain/loss generated on the dissolution. Do I add the ending balance of the AAA Account to the Capital Stock/APIC to determine what the gain/loss is?
Expert:  Stephen G. replied 9 months ago.

There's not enough information for me to answer that.

The gain or loss should have been determined and recorded when you booked the dissolution based upon the

net distribution/sale (whichever or both) when that was recorded.

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