S Corp termination

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  • lady di
    Junior Member
    • Jan 2016
    • 21

    #1

    S Corp termination

    I have a new client who terminated the S Corp dec 31, 2024.
    I need a refresher course on how to close out the deprec for them. They have a tractor basis of 26000 and accum deprec of 14100 and a pickup with basis of 61000, accum deprec of 43700 (including 10000 Sec 179). Both are currently titled in the S Corp name. They want to convert to personal use at this time. What do I use for sales price for these items...or do I even need a sales price.
  • terryats
    Senior Member
    • Jan 2019
    • 258

    #2
    The basis of assets distributed to shareholders when closing a s-corp is the fair market value. He does not report anything until he sells it. The s-corp will have to report it as a "deemed liquidation", and if an asset's fair market value exceeds its depreciated basis, you will unfortunately need to calculate and then show a gain on the distribution of the asset to the shareholder on the final corporate tax return

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    • lady di
      Junior Member
      • Jan 2016
      • 21

      #3
      Can/should he sell it to himself for FMV in order to convert it to personal use>

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      • terryats
        Senior Member
        • Jan 2019
        • 258

        #4
        No, only gets distributed to share holders. Share holders then do what they want with it. Use it for personal use, another business, sell it ( it is now personal property, and if sold at a loss no capital loss, if sold at a gain then a capital gain)

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        • lady di
          Junior Member
          • Jan 2016
          • 21

          #5
          thanks so much...think I got it and can finish up now

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