Reading your web link to thebalancesmb.com, in transferring a fully depreciated furniture item from the schedule C to the S-Corp, I would dispose of it listing the day before the S-Corp began.  Then I would enter the asset into the S-Corp with a value of 0, with the date in service being the date the S-Corp began.  For each asset disposed, the price would be the lower of FMV or Cost - total depreciation.  Am I right?

The S-Corp has 3 shareholders.

"The S-Corp has 3 shareholders."

You're going to need to weigh these options, and understand that if you do it one way, the individuals might have taxable gain and they might not appreciate this scenario. It also depends on the asset type, because we don't want to have a fight over who gave more valuable items to the business startup. And you always want to look for favorable treatment for the individuals and for the S Corp. That is why, for my example of selling an asset to the corporation, one shareholder might own the Well Drilling rig that is being sold into the S Corp, while someone else owns the Grader.

Just as examples.

Look at IRC 351.

Assets get contributed to the S Corp.

No sale.

"Assets get contributed to the S Corp.

No sale."

Doesn't it matter where they are already being held, such as a different S Corp or a partnership that is merging with another to form that S Corp?

If they are coming out of a corp, yes. Then they come out of that corp to the individual owner as a deemed sale at FMV. Then the owner contributes them to the new corp.

Here, OP said it was from a sole proprietor.

Thanks.

I've seen more people going the other direction; getting out of having employees and going back from S Corp to sole operator. Sad.

I have a sole proprietor transferring to a wholly owned S Corp. Is there a way to dispose of all the assets at once on the personal return prior to the formation of the S corp, or do I have to do them individually on the personal return?

You don't dispose of them per se. You stop depreciating them as of the date of incorporation, using the short year rules.

Thanks. Where are the short year depreciation options on an individual return? 

I don't use ProSeries so I can't help you with that.