Filing a final 1120

Forum|Forum|5 years ago
April 12, 2021
5 replies
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I am preparing a final return for a corporation. All assets were distributed to shareholders as of year-end except the amount to pay accrued income taxes. Is it appropriate to answer that there are 0 shareholders for question 10, Sch K, and No to question 4b, Sch K ( asking if any individual owns more than 20%)? Also, is it appropriate to show $0 for assets, ignoring the cash left at to pay the final income tax?

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Best answer by M-MTax

You know if you adopted a plan to dissolve or liquidate you're supposed to file form 966? https://www.irs.gov/pub/irs-pdf/f966.pdf

The number of shareholders should be the number immediately before the dissolution as should the answer to individuals owning more than 20%......assets can be zeroed even if there's a small reserve.

M-MTaxAnswer

Level 15

You know if you adopted a plan to dissolve or liquidate you're supposed to file form 966? https://www.irs.gov/pub/irs-pdf/f966.pdf

The number of shareholders should be the number immediately before the dissolution as should the answer to individuals owning more than 20%......assets can be zeroed even if there's a small reserve.

dagshopAuthor

Level 2

Thank you very much. I did already file the 966.

Rick19744

Level 13

A couple of follow-up questions:

what assets were distributed to the shareholders?
how did you report the shareholder distributions?

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

dagshopAuthor

Level 2

Distributions were cash and mineral rights. I will report a capital gain on the mineral rights on the final return. I will report distributions on question 13 of Schedule K, and will issue a 2021 1099-DIV to the shareholders next January.