Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax

I need guidance of how to close a S-Corp entity and change

Customer Question
a LLC company name for...
I need guidance of how to close a S-Corp entity and change a LLC company name for both federal and state purposes. There are several other transactions to occur, yet I'm not sure if there are any tax consequences that I need to to consider with the following plan of action:   I have 2 companies... Company A is a S-Corp, Company B is a LLC. There are some assets in Company B that Company A can purchase. Company B also has an outstanding Notes Payable to an owner and Company A. Once company B is closed and assets transferred/purchased, I plan on changing the name of Company A.    I'd like to work with someone who can review my books and walk me thru the transactions to ensure a smooth transition or perhaps suggest another plan of action. My overall goal is to minimize any tax consequences overall.
Submitted: 9 years ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 9 minutes by:
12/3/2008
Tax Professional: RD, Certified Public Accountant (CPA) replied 9 years ago
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
Verified

Are you 100% owner in both the entity? Are you filing the LLC as a S Corp for tax purposes?

 

Why do you want to close Company B?

Ask Your Own Tax Question
Customer reply replied 9 years ago

1) There are 3 owners for each entity and yes they are the same. 2) No, the LLC is files as a partnership.

 

At first the owners wanted a seperate company as a S-corp. There has been minimal activity with Company B for the past 2 years. They have now changed their mind and just want one company as Company A with 2 lines of business, however they want the 'name' of of the S-corp.

Customer reply replied 9 years ago

Sorry, I just reread my question and have mixed up Company A and B! Please review changes I have 2 companies... Company A is a S-Corp, Company B is a LLC. There are some assets in Company A that Company B can purchase. Company A also has an outstanding Notes Payable to an owner and to Company B. Once company A is closed and assets transferred/purchased, I plan on changing the name of Company B . There is minimal activity with Co A (S-Corp) and most activity occurs with Co B (LLC). I've suggested that once we get the assets of Co A to Co B (from the S-Corp to the LLC) we could change the name of Co A (LLC) to that of Co B (S-Corp) but ending with LLC, vs. Inc. Co A (LLC) is filed as a partnership, Co B (S-Corp) is filed as S-Corp. Again, sorry for the confusion. If you determine this is a project you'd like to accept we can change to actual company names.. which will be easier! Thanks!

Tax Professional: RD, Certified Public Accountant (CPA) replied 9 years ago

IS the fair market value of the assets in S Corp higher than the cost basis?

In order to close the S Corp the assets and liabilities will have to be liquidated and will result in undesirable tax consequences if the S Corp has appreciated assets.

 

Is the Company A an LLC which has elected S Corp or is it formed as a Corporation?

 

Since these issues are normally complex and would need detailed information, I would suggest you to hire a local professional to help you with this matter.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

Ask Your Own Tax Question
Ask RD Your Own Question
RD
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
8,784 Satisfied Customers
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

RD is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,338 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,980 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
We have FLorida LLC taxed as partnership. Because we are
We have FLorida LLC taxed as partnership. Because we are retirement age, were concerned about future SS benefits, so on the advise of the accountant started filing W-2 in addition to 1099. It seems th… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Should LLCs listed as a Partnership (P) or Individual/sole
Should LLCs listed as a Partnership (P) or Individual/sole proprietor or single-member LLC receive 1099-misc?… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I am filing the taxes for our LLC. We are a partnership of 4
I am filing the taxes for our LLC. We are a partnership of 4 people. These are taxes being filed late since they are for the 2016 year. We were mistaken into thinking that we would not have to report … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,084 satisfied customers
Can an LLC (partnership) pay taxes on income and avoid the
Can an LLC (partnership) pay taxes on income and avoid the partners having to pay the taxes?… read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,084 satisfied customers
I have an LLC in CA. Originally it was a partnership, filing
I have an LLC in CA. Originally it was a partnership, filing a 1065 to the IRS. Now, the other partners have left and I want to file as a single member LLC, flowing back into my schedule c. The change… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,808 satisfied customers
I have a question regarding the state and local tax
I have a question regarding the state and local tax limitation passed by congress limiting the deduction to $10000. Is this final or is it still being ironed out by the powers that be? My clients are … read more
Carter McBride
Carter McBride
LLM
265 satisfied customers
You there? I'm in a two member LLC partnership with a friend
I'm in a two member LLC partnership with a friend and incorporated in Delaware with an EIN such that we can setup a business bank account. Our bank account is in California, do we file taxes in Delaware or California? … read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,808 satisfied customers
Can a parent with state, local & property taxes in excess of
Can a parent with state, local & property taxes in excess of 20k transfer his primary residence to his son for 1.00 in 2018 so the son can then itemize & benefit from the 8,600 of annual property taxe… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,808 satisfied customers
We represent an LLC partnership where the Managing member
We represent an LLC partnership where the Managing member wants to reward certain employees with stock options/some kind of equity ownership. Since this is not a corporation, what avenues should we re… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Can I own assets in a LLC and not be a member of the LLC?
Can I own assets in a LLC and not be a member of the LLC? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,084 satisfied customers
Penalty for late filing of partnership LLC tax return, not
Penalty for late filing of partnership LLC tax return, not eligible for Rev Proc 84-35 relief because one of the partners is a foriegner… read more
Barbara
Barbara
Enrolled Agent, Paralegal
3,808 satisfied customers
A client opened an LLC partnership in June 2017. They
A client opened an LLC partnership in June 2017. They received payouts from the company in 2017 from investments made by their partner. They have no basis in the company. If the LLC elects to operate … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
1,084 satisfied customers
I have a penalty for late filing of partnership LLC tax
I have a penalty for late filing of partnership LLC tax returns and looking for examples of reasonable cause Reading about the FTA and checking if we could be eligible … read more
Carter McBride
Carter McBride
LLM
265 satisfied customers
I haven't filed taxes state and federal since 1995 i never
I haven't filed taxes state and federal since 1995 i never owed anything I always got a refund my ex husband let a guy use my address as head of household that when all my trouble they had me proving … read more
abci168
abci168
Principal
27 satisfied customers
For a ny state partnership tax return, if you file an
For a ny state partnership tax return, if you file an extension but don't pay anything and then end up owing a lot. Do they still recognize the extension or do they charge a failure to pay penalty (fo… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I have an LLP (limited liability partnership) with an
I have an LLP (limited liability partnership) with an operating agreement that indicates it's organized as a general partnership. I am the designated 'tax matters partner'. The *other* partner is resp… read more
abci168
abci168
Principal
27 satisfied customers
I am 50% partner in an LLC, taxed as partnership (form
I am 50% partner in an LLC, taxed as partnership (form 1065). The other 50% partner is my friend. This LLC's only assets were 2 single family houses, which we rented out. In 2016 we have sold both of … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,980 satisfied customers
Company A transferred assets and liabilities to a newly
Company A transferred assets and liabilities to a newly formed Company B … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x