Hi, everyone.
My wife has a single member LLC she has had for about 10 years and will continue to have it going forward.
In the past she has always filed as an S Corp, however, based on some business and lifestyle changes, her CPA recommended for 2024 to file a final return as an S Corp. On the 2024 business taxes, the 1120S has the boxes checked for "final return" and "S election termination".
A few questions for this team.
1a. There is a section in TurboTax in the income section related to the 1120S which has a checkbox for "This S Corp ended in 2024". Do I select that checkbox? My confusion stems from, yes 2024 was the last year we will file her company as an S Corp, but she didn't actually close the business.
1b. If we do select yes on that checkbox, what is considered the disposition of the company? The next question in TurboTax is related to the disposal of the S Corp with the following options. 1) I sold it outright 2) I sold it and am receiving payments 3) I disposed of it but not by selling it. 4) none of the above. She didn't sell it, so it wouldn't be 1 or 2. Option 3 doesn't seem correct as the "learn more" functions calls out gifts or transfers. So I am assuming option 4.
2. Since my wife will treat the business as a sole proprietorship going forward, I assume she needs to file IRS form 8832. Who normally does this, i.e., my wife or her CPA? It wasn't part of what the CPA provided when the taxes were filed.
Thank you in advance for your feedback.
