A client in the middle of the year went to attorney and became an LLC. He had to call the IRS to find out if LLC - 1120, 1065, or soleprop. He is a 1120 but sent in the 2253 to become an 1120S so we are 1120S. Now, do you have to transfer assets over from the 1120S because nothing was legally put in the 1120S. All the assets are depreciated out and the payroll was cut off and still had liabilities. He still wrote checks out of the sole prop. business due to not having any checks for the 1120S. So if he transfer to the 1120S - all he would have is liabilities and understand that is the credit on a balance sheet but the debit is what is you do transfer.
He also paid his credit cards with the LLC checking account and now confussed on what to debit since the expense was written off on the scedule C the 1st 6 months of the year. Any ideas on what to do with making payments out of the LLC or some of his personal expenses for the LLC on how to handle it? Do you put it down as a distribution if did not transfer any thing over to the LLC so confused.
He also paid his credit cards with the LLC checking account and now confussed on what to debit since the expense was written off on the scedule C the 1st 6 months of the year. Any ideas on what to do with making payments out of the LLC or some of his personal expenses for the LLC on how to handle it? Do you put it down as a distribution if did not transfer any thing over to the LLC so confused.