I have a client who provides air charters to executives. The company is an S-Corp and owns 1 airplane. In order for the S-Corp to do business it was using a flight certificate of another company in order to fly. The S-Corp then decided to buy the C-Corp which owned the flight certificate. I’m trying to figure out the best way to account for the transaction for both accounting and tax purposes. The taxpayer would like to keep each company separate so that he may be able to attain an additional flight certificate. If I keep the companies separate, I’ll be showing all revenue in the C-Corp (flight revenue) and all expenses in the S-Corp due to depreciation on the plane and the pilots pay. If the S-Corp leases the plane to the C-Corp then I’ll have to deal with state sales tax between the two companies. I not sure what the right approach is, if anybody could lend some guidance it would be appreciated. Thanks
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