Final Tax Return for S Corp - Home Office Asset Disposal

[vicstir]

I am working on filing my final tax return for my S Corp. 

I have used turbotax for entire life of the business and in order to take my home office expense and depreciation used the "Depreciation of Assets" section in order to calculate and deduct the depreciation of the portion of my home office each year.  It shows up as an "Asset" that gets depreciated and as I have dissolved the company I am trying to "dispose" of all the assets from the business.  None of these options fit, so not sure what to choose in order to "dispose" of my home office portion from the business.

[Anonymous_]

You are an employee of the S corporation and can be reimbursed by the corporation for use of the office in your home (e.g., the corporation could pay you rent or reimburse you in some manner for expenses).

However, I cannot imagine a scenario where your home office should be listed as an asset of the corporation.

I am going to page @Rick19744 (again) for input here.

[Mike9241]

you have a problem unless the S-Corp owned the home.  if it didn't it was not entitled to any depreciation or other HO deductions.  nor would the expenses have been deductible on your 1040 from 2018 onward since you are an employee and those are employee expenses that were no longer deductible during this period.  what you should have had was an accountable plan. you get reimbursed for the expenses after submitting expense reports. the S-Corp would have gotten the deduction and under an accountable plan you do not report the reimbursements.  If the S-Corp didn't own it I  strongly urge you to seek professional help in resolving this tax issue.   the only other way, and it's not proper unless te S-Corpp owned the property, is to handle this is to distribute the property but you must use the Fair Market value which means you'll have a taxable income since it's likely the FMV will exceed your tax basis in the corp. you will also need to complete form 7203 for the S-Corp in your 1040 which will spell everything out for the IRS.

[Rick19744]

I think a few more details are in order:

• Exactly what assets have been depreciated?
  • 100% business assets owned by the S corporation?
• What is or has happened to the assets noted in your facts?
  • Sold?
  • Distributed to you as the shareholder in a liquidating distribution?
• Keep in mind that a liquidating distribution of an S corporation is not reflected on the final K-1, but is reflected on a 1099-DIV boxes 9 and 10 as appropriate.