Treatment of Assets during S Corp. Liquidation

[Tax Sleuth]

I am assisting an S Corporation owner with closing his business, and his final Form 1120S has to be filed. He purchased some equipment toward the end of 2016, which cost around $1,500. Does this equipment have to be treated as having been sold to the shareholder for fair market value in accordance with a plan of complete liquidation? My understanding is this is true for the assets that have already been depreciated. However, is it possible to expense these recently purchased items in 2016 in accordance with the repair regulations and not have to report any potential gain to the shareholder?

[TaxGuyBill]

I could be wrong, but I think the 'sale' at FMV applies to ALL property, not just property subject to depreciation.

https://www.law.cornell.edu/uscode/text/26/301

If that is the case, expensing via an election it won't do anything. Hypothetically, you would need to 'sell' a 49 cent pen at FMV.