Distribution of assets

[Maxtax899]

I am almost done with my s corp 1120s return using Turbotax Business. I am trying to distribute cash and some assets. Under 2022 distributions to shareholders I entered "yes, the corporation made distributions to shareholders in 2022". Then under Amount Paid By Company I entered the cash portion of $2,471 and the property portion of $650 (A few instruments and tools). A few screens later Turbotax gave me this screen...

"If property other than cash was distributed, attach a statement to provide the following information.

The date the property was acquired.

The date the property was distributed

The property's FMV on date of distribution.

The corporations basis in the property."

Is there a way to enter this information in Turbotax business with my 1120s return? there must be a form or something I can attach? This is my last hurdle in the process!

Thank you!!

[ThomasM125]

If you go to the Forms Mode and search for a form (click on Open Form) you can type in Miscellaneous Statement and you will see a statement you can type on and it will be included with your tax return when you file it.

[Maxtax899]

Thank you ThomasM125. That is a huge help! Is there a simple way to explain  "The corporations basis in the property"?  I do appreciate it!

[ThomasM125]

If the corporation purchased the property, the basis would be it's cost less depreciation taken on it. If the property was contributed by a shareholder, then the basis would be the shareholder's basis at the time of the contribution plus any gain recognized on the contribution by the shareholder.

[Maxtax899]

Thank you, it's starting to fit together. Does the fair market value fit in with the "cost less depreciation"? The depreciation part for the corporation basis is what I am struggling with.

[ThomasM125 · Accepted solution]

Normally, the value of an asset would decrease over time and that is why you deduct depreciation, to account for the decrease in value. So, the fair market value may approximate the cost of the asset less depreciation taken on it, but it is not an exact science, so the fair market value can be different from the cost less depreciation. The fair market value would be what you could sell the asset for in the open market.  

[Maxtax899]

Thank you ThomasM135. That was a great explanation. I think I get the general idea. Like you said it's not an exact science.