Question

Dissolution of an S Corp and Assets

Forum|Forum|4 years ago
January 17, 2022
3 replies
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My husband dissolved his S Corp in 2021. The only asset was the company car which has an estimated value of $13,000 after depreciation. The original total was approx. $20,000. He plans on keeping the car and taking over the payments as a personal vehicle. When we are doing the taxes for the business should we mark the car as sold, gifted or other?

TurboTax Business Windows

M-MTax

It's a distribution to the shareholder on the K-1 at FMV. Corp doesn't recognize any loss.

PatriciaV

Employee

See response by @M-MTax.

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M

Mike9241

this is a property distribution to the shareholder. I would suggest getting a tax pro involved. if you want to try to do it yourself read

the 1120s instructions

https://www.irs.gov/pub/irs-pdf/i1120s.pdf

start with line 16d on page 35 and the distributions on page 46.

you will not be able to e-file because of the statement required when property is distributed.

M-MTax

@PatriciaV The IRS pub in your link is not for corporations.

Who should use this publication.

You should read this publication if you are an employee or a sole proprietor who has business-related travel, non-entertainment-related meals, gift, or transportation expenses.