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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Assets were distributed to S corp shareholder. The assets ...

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Assets were distributed to S corp shareholder. The assets (desk, chair, computer) were fully depreciated. What journal entry do i use to show the distribution of these assets? do i need to issue a 1099 to report the distribution of the assets to the shareholder. the shareholder cancelled his shares with the s-corp.


First you must report a sale of the assets on Form 4797 of the Form 1120S. Distributions of tangible property are at fair market value. As these assets had wbeen fully depreciated, there will be a gain to the S Corp. The distribution will be reported on M-2 line 7 and Schedule K-1 line 16D.

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