C corp and S corp dissolutions

[Penelope]

Does form 966 need to accompany final returns? (I don't have a copy, but client engaged a lawyer to handle dissolution.)

[Penelope]

Forgot to ask about C corp NOL

What happens to NOL in C Corp?

[kpangelinan]

What happens to NOL in C Corp?

I believe it just gets carried forward just like any other NOL on a personal return.

[DaveinTexas]

Does form 966 need to accompany final returns? (I don't have a copy, but client engaged a lawyer to handle dissolution.)

From memory, I don't have the instructions in front of me, the 966 must be mailed out 30 days prior to the dissolution. I've seen dissolutions performed with no 966 filed at all and no penalties were assessed. I suppose the 966 just gives the IRS center a heads up that a final year return is on its way.

As for the NOL in a C corp, at dissolution, it dies with the Corp (no carryover to shareholders return) and no carryover to an S Corp if the goal is to convert to an S Corp. I'm no C Corp expert so others feel free to chime in if I misspoke.

[kpangelinan]

What happens to NOL in C Corp?

I thought you were just asking this in general, but if it's part of a dissolution, then I agree with DaveinTexas and his previous post, it's just gone.

[Penelope]

Thank you both

Thanks for your feedback on the NOL. Also, re-reading the 966 instructions, it did not appear that the form was required with the 1120. I wondered if it was filed, but decided that the lawyers should have handled that (whether or not they did!)

[JON]

966

If there is going to be liquidating distributions you need to have the 966 to take stockholder's basis against the distribution. This becomes impirtant if you are going to receive more than one distribution during the liquidation. As I remember the 966 instrutions they used to say attated a certified copyt tof the director's minutes authorizing the dissolution. What is a certified copy?? IRS jokely said just write I CERTIFY on them and that was probably enough.