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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?

Level 1
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?
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1 Comment 1
Level 15

Is this the first year for the SMLLC and they're electing SCorp status? 

 Doesn't sound like it but want to be sure.


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