LLC taxed as S Corp buysout others...

[AZ-Tax]

Got a client who bought out others. How does the client report these amounts paid out on the 1120S form?

[David1980]

Bought out other companies?

So what you're saying is he took cash and gave it to company B who gave him assets in exchange?

That's simply converting one asset into another. If they bought the whole business then you probably would file an 8594 reporting the transaction. If they simply bought assets of the business then I don't think there is any reportable transaction.

[ChEAr$]

sounds complicated

Got a client who bought out others. How does the client report these amounts paid out on the 1120S form?

But I gather from what you say that your client bought out all the other members of the
LLC. If so, it was he who bought them, not the LLC, so nothing goes on any 1120S.

However, since he's not a single member LLC, the 1120S will be final as of the date of
the buyout, and he must go through the paperwork with the state to "reorganize" the LLC.
this means filling out paperwork for the state (see a lawyer). Then he will have to get a
new FEI for the new LLC effective day after the buy out.

[AZ-Tax]

Possibly reported on M-1?

Is it possible the tax preparer may have reported the buyout amounts that the member paid to the other LLC members, on the businesses 2005 tax return - form 1120S - M-1 (Sch L) under Capital Stock?

[ChEAr$]

Look at it this way

Is it possible the tax preparer may have reported the buyout amounts that the member paid to the other LLC members, on the businesses 2005 tax return - form 1120S - M-1 (Sch L) under Capital Stock?

IF I had the money and IF I decided to buy all the oustanding common stock of General Motors, thinking I could do a better job than present management, would any of my
purchase money go to the corporation? No, but to the shareholders directly; thru brokers of course less commissions, but not to the corporation.

Buying stock of a corporation or LLC members' ownership shares is the same thing and
doesn't appear on the organization's books.

[AZ-Tax]

It was entered as....

I just acquired this client and upon looking at their Quickbooks, the amounts the sole member of the LLC paid to the other members back in 05 and 06 was first entered as an
(-) amount then the same amount was entered again the same day as a + entry thus making it a wash.

[les grans]

Harlan says: "However, since he's not a single member LLC, the 1120S will be final as of the date of the buyout, and he must go through the paperwork with the state to "reorganize" the LLC."

Why? Seems to me the LLC has elected to be taxed as a corporation, and made the S corporation election, and that should stay that way no matter how many/how few shareholder/members the S corp/LLC has.

[I'm assuming that the OP meant that his client has bought out the other owners of his LLC/S corp. The post sorta confused me...]