S-Corp final return

Did the S Corp hold the real estate?

Or, did the friend hold the real estate?

Because that is a significant difference.

The real estate should be reported as a sale based on the fair market value at the time they were distributed.

If the real estate was transferred out of the S corp into a Family trust two years ago, there is nothing to do regarding the real estate on the final S Corp return, because all of that should have been handled on the filing two years ago. But, it is unusual (and not recommended) to hold real estate in an S Corp. Perhaps this person who owned real estate, also owned an S Corp. But the real estate and the S Corp have nothing to do with each other, setting aside common ownership.

As usual, more details will be helpful.

Thanks for everyone's input.  It looks like the assets should be distributed to shareholders on the final return in year 2121.  Then the assets should be depreciated on a new basis on 1040 schedule E in next year.