Question
How do I convert Single Member LLC Balance Sheet after electing to be taxed as s-corp when asset loans are greater than tax basis which results in negative equity?
For example, LLC Ending Balance Sheet:
$10,000 cash
$0 Fixed Assets (Fully expensed through bonus or 179)
$15,000 Loans to acquire Fixed Assets
($5,000) Negative Equity
How do I show this in my S-Corporation Return Balance Sheet?
Some "Experts" have told me that the $5,000 would be a taxable gain to the LLC owner. Is that correct?
$10,000 cash
$0 Fixed Assets (Fully expensed through bonus or 179)
$15,000 Loans to acquire Fixed Assets
($5,000) Negative Equity
How do I show this in my S-Corporation Return Balance Sheet?
Some "Experts" have told me that the $5,000 would be a taxable gain to the LLC owner. Is that correct?
