SCorp has two remaining members. One Old member that had in the buy out that he would get X amount if the business was sold.
Is the amount that was paid a cost of Sale, or a distribution of dividend?
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"Is the amount that was paid a cost of Sale, or a distribution of dividend?"
There is never Dividend for S corp and this is not a Cost of Sales.
And it matters if this is Entity sale, or Assets/Liability, or only that one "old member" is selling? And his Basis, compared to "X" amount? Who is this sold to; another shareholder?
Have you worked on business sales in the past, or is this your first?
An interesting article for you to read in tax easy terms. You may want to get a mentor on this one.
https://www.fool.com/knowledge-center/tax-treatment-of-selling-a-subchapter-s-corporatio.aspx
Thanks
Ultimately I issued a form 8594 to notify the seller of the purchase price.
A good stickey wicket
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