C Corp.-Sale of

[Bird Legs]

Client is sole shareholder of a C Corp. which is a restaurant. The client owns the building
& land individually, outside the corp. Corp. pays him rent.
The equipment in the building, stoves, tables, refrigerators, is owned by the corp.
Problem, client sells the bldg. & land plus the equip. inside the bldg.
Total sales price for land, bldg. & equip. $395,000.
Client receives this at closing, outside the corp.
The equip., etc. had a value of $2,700.
Told client that if this was the selling price of the equip. then that money should
be deposited in the corp. bank acct.
The sales agreement nor the closing statement separate the sales price of the equip. from the rest of the bldg. & land.
How would you report this on the 1040 and on the 1120?
Thanks

[veritas]

Show the equipment as a sale in the corporation and also on the 1040. Use the new basis on the 1040 so there will be no gain. Have owner pay corp for equipment.

[Bird Legs]

This was the

answer I was looking for. I had not thought of handling it that way. That does get the
total sales price onto the 1040.
Again, thanks.