How to report transfer of S Corp vehicle to owner

[david3]

S Corp single shareholder wants to transfer the company vehicle to himself. 

My search resulted in many unrelated topics.

The vehicle originally cost $60K in 2019 and only $3K basis remains. I know that the FMV will be taxed at the ordinary tax rate because of depreciation recapture, but I don't know how to enter this in PS.

Entering the information in the property distributions statement on Schedule K line 16 d does nothing.

Do I record it as a sale in the dispositions section of the Asset Entry Worksheet, just as I would with any sale? 

Thank you.

[Terry53029 · Accepted solution]

I believe it would be reported as a sale. Here is an article from The Tax Advisor with examples.

 https://www.thetaxadviser.com/issues/2011/apr/casestudy-apr2011.html

[david3]

Thank you, Terry.

[Accountant-Man]

What is the reason for the transfer-payment of wages, repayment of loans, distribution, liquidation?

[david3]

Distribution. He isn't using it for business and wants to transfer it his name because the insurance will be significantly lower.

[The_AntiTax_Man]

A word of caution:  the change in ownership may create the state sales/use tax to the vehicle's new owner.  

[david3]

Yes. Thank you.

[Accountant-Man]

Assuming there is enough AAA for distributions. I believe the FMV is the value to use for the amount of the distribution.