Have a Tax Question? Ask a Tax Expert
Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.
What happened to the 83K of inventory and 3756 of equipment? Where did it go? Was it sold? Tossed in the trash? GIven to a shareholder?
Is the entity an S-COrp?
the person who bought the shares is using them. Yes it is an S corp
Now you have confused me.
Is there a new owner of all the shares of the corporation?
How many shareholders before the sale?
I have a settlement statement from the lawyer showing the sale of stock to an individual. There is no mention of inventory and equipment.
How many after?
The inventory and equipment are part of the corporation.
You sold the corporation if you sold all of the stock
Ok so it becomes part of their basis, yes?
the shareholders who sold the stock
It's nobody's basis. It's part of the corporation
Inventory and equipment are the assets of the corporation
the corp is liquidating
The shareholders sold the company, not individual assets
Whose tax return are you preparing? The new owner or the old shareholders?
the old shareholders
the old shareholders and the final s corp return
The old shareholders will have a final K-1 based on the last day they were shareholders. There is NO liquidation if they sold their shares.
I'm also assuming you are not preparing the corporation tax return
yes i am preparing the corp final return
Do you represent the purchaser of all the shares?
When was the sale completed?
I'll make this is as simple as I can.
You do not prepare an 1120-S return.
There was no liquidating event.
Your stock SELLERS have a capital gain or loss on their shares. It is reported on Schedule D of the 1040
Inventory, sales, revenues, etc and the corporation tax return are all the problem of the shareholder on 12/31/12
If this answers your question today, won't you please take a moment and rate our answer.