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Sales of a S-corporation

aahelper1
Level 3

Dear All, 

Happy holidays everyone!

When I report the business sales of a s-corporation, on the final k-1s, do I need to take the shareholders basis into account when I report the gain and loss?

Thank you so much for your help!

 

Sylvia

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1 Best Answer

Accepted Solutions
IRonMaN
Level 15

Sale of business assets - no.

 


Slava Ukraini!

View solution in original post

11 Comments 11
IRonMaN
Level 15

Sale of business assets - no.

 


Slava Ukraini!
aahelper1
Level 3

Thank you so much for your replied.  They sold the business, and it will be their final K-1.

abctax55
Level 15

Sold the business meaning:

1) sold the assets?

or

2) sold the stock?

Different treatment depending on which one....

 

HumanKind... Be Both
aahelper1
Level 3

They sold the assets and goodwill, thanks!

sjrcpa
Level 15

Followed by a distribution of all proceeds and a liquidation of the S Corp?

Otherwise it's not a final return.

The more I know, the more I don't know.
IRonMaN
Level 15

Picky, picky 😜


Slava Ukraini!
aahelper1
Level 3

Thank for getting back to me on my question. 

You are right, it won't be the final k-1, just confirmed with them and now they want to keep the corporation open for a little longer maybe will close in 2024.

Therefore, I just need to report the sales of the business on the return, and pass the capital gain through the k-1s, and when the corporation liquidate then they will use their basis to figure out the gain or loss on their personal return?

Thank you in advance!

 

 

aahelper1
Level 3

Thank you so much!!  Happy Holidays to you and your family!

sjrcpa
Level 15

Therefore, I just need to report the sales of the business on the return, and pass the capital gain through the k-1s, and when the corporation liquidate then they will use their basis to figure out the gain or loss on their personal return?

Correct.

The more I know, the more I don't know.
aahelper1
Level 3

Thank you so much for your guidance!   

Happy New Year to you and your family!!

sjrcpa
Level 15

You're welcome. Happy New Year!

The more I know, the more I don't know.