Question

Closed a multi partner S corp in March 2019.

Forum|Forum|6 years ago
February 10, 2020
2 replies
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I closed a multi partner S Corp in March 2019. There were no debts left to be paid and there were no assets. What do I do with the amount left in Paid in Capital?

TurboTax Business Windows

M

MinhT1

You can distribute the cash balance among the shareholders proportionately to their shareholding. As this is a return of money invested (or profit already taxed through the shareholders), the distribution is not taxable.

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Rick19744

Employee

If the S corp "closed" in March of 2019, the S corp return is technically late. So don't be surprised if you get a penalty notice from the IRS.

To address your specific question, liquidating distributions of an S corp are to be reported on a form 1099-DIV in box 9. These are not to be reported on the K-1.

Attached is a link to the form and instructions:

https://www.irs.gov/pub/irs-pdf/f1099div.pdf

https://www.irs.gov/pub/irs-pdf/i1099div.pdf

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.