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Answered in 14 hours by:
4/28/2015
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 28,856
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
VerifiedThat's right, since you're not disposing of any business property no 4797 is required.
And yes AAA CAN be negative. The AAA, however, cannot be reduced below zero by DISTRIBUTIONS. Distributions by an S corporation with accumulated earnings and profits (AEP) are tax-free only to the extent of the AAA and stock basis (§ 1368(c)(1) and (b)(1)). (Really an aside here, as this would have happened before whatever was contributed caused the issue).
And because this is a dissolution/distribution, and not a sale to a second party, no 8594 either.
And, yes you've handled this all correctly. Distributing the accumulated depreciation, hard assets and physical distributions (since no cash) is correct.
Finally, yes, as this is a deemed sale, selling for zero gets that done (presumably value is zero) and 966 was appropriate.
Let me know if you have questions...
Lane
And yes AAA CAN be negative. The AAA, however, cannot be reduced below zero by DISTRIBUTIONS. Distributions by an S corporation with accumulated earnings and profits (AEP) are tax-free only to the extent of the AAA and stock basis (§ 1368(c)(1) and (b)(1)). (Really an aside here, as this would have happened before whatever was contributed caused the issue).
And because this is a dissolution/distribution, and not a sale to a second party, no 8594 either.
And, yes you've handled this all correctly. Distributing the accumulated depreciation, hard assets and physical distributions (since no cash) is correct.
Finally, yes, as this is a deemed sale, selling for zero gets that done (presumably value is zero) and 966 was appropriate.
Let me know if you have questions...
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 28,856
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
VerifiedLane and 87 other Finance Specialists are ready to help you
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