Timing of S-Corp dissolution and 1120-S

[Gary2]

A calendar-year S-Corp votes to dissolve on Dec. 29, 2010, effective immediately and mails the paperwork to the state's Secretary of State. The state records the effective date of dissolution as Jan. 3, 2011.

Can the S-Corp file the 2010 Form 1120-S as a final return? Or must they file a short year final return for three days of 2011? Does this require more state-specific information?

Note that other than the paperwork, it isn't likely to change any tax liability at the federal level. For the state, I'll probably call them up and ask whether the statutory minimum tax and/or annual corporate report filing fee will be due for 2011.

[Nashville]

Short Year Return

Gary my experience in two states where this has happened is that the state would require a short year return.

From all my discussions and protests, it appeared that it was a matter of revenue for the state. Neither state was concerned about the profits for the short year, but one of them wanted the minimum filing fee ($100 at the time), and the other imposed a separate tax on assets/equity without respect to whether there was profit or not.

Of course, the issue would be up to the state in question, but I couldn't find any relief in either TN or AL.

[DMICPA]

1120-S dissolution

If there was no activity or any business being done, there should not be any minimum fees for the Corp.

In California it takes several months to receive the dissolution paperwork. The timing of the States backlog does not dtermine how long the Company was in business.

I would file a final 2010.

[JON]

Agree

when did it liquidate? If everything was done - all assets sold/or disbursed, all liabilites paid and no business activity in 2011 you are done.

[DMICPA]

Dear Jon letter

I agree with you! Great minds think alike