S Corp Dissolution

[DaveinTexas]

S Corp Client; his intention was to dissolve the corporation in 2006. Its a little late to file form 966 for 2006 because thirty days beyond Dec 06 has obviously passed. If it is too late to dissolve the corporation in 2006, how do I handle a dissolution in 2007 before the 2007 1120S is available?

Can I prepare a short year 2007 1120S on a 2006 tax year 1120S form and write "No Activity" at the top?

P.S. All assets were sold to his colleagues in the business in late 2006 and all cash in the account, around $6k, was used to pay utilities and other expenses related to closing down the business; outstanding balances with creditors, etc.

Hep me buddies!
TIA

[thomtax]

Dave,

I posted a very similar question a week or two ago. I was going to send you a link to a site that had discussion, but it appears to be down now. I will try again tomorrow.

I can answer some of the questions, at least for Arkansas.

1. Here it is necessary to file the dissolution resolution with the Secretary of State. Believe it or not, it is actually more expensive to dissolve one than start one. Here, if you don't file this official disolving, the stockholders are prohibited from being shareholders of a new s corp.

2. My situation was that the corp was actually dissolved last year. At this point in time, after reading posts, was to ignore the 966 and file the final (box checked) return.

3. This is strictly my opinion, and I reserve the right to be wrong, you would file the 2006 return, do the dissolving steps in 2007 and file the 2007 final return and Form 966.

Of course there are others with much more experience in this field and hopefully they will chime in.

LT

[veritas]

Was a formal plan of dissolution

adopted by the shareholders and was it filed with the state? That would determine the final year of the corportion.

[DaveinTexas]

thanks

the plan of dissolution was not filed with the state. This will be done shortly.