Transferring assets from one S-corp (in CA) to a new S-corp (NV)

[Lakeview88]

I moved from CA to NV at the end of 2022.   As a result of this move, I disolved the S-corp that I established in CA for the last 8 years and filed the final 1020S return for tax year 2022 for this CA based S-corp.   I established a new S-corp (a different EIN) in my new state of NV with a new EIN started January 1st, 2023.  I also transferred all assets from my old CA S-corp (essentially $50K cash in bank account and $3K account receivables)  to my new NV S-corp.

How do I reflect the transferred assets of $53K in my 2023 1020S for the new S-corp in NV, which would be the first time that I will be filing for 1020S under this new EIN?

[Critter-3]

Although in your mind you "transferred" the assets in reality the assets were taken out of service when you closed the CA business   and then you will enter them as new assets to the new company.  You will start the depreciation again using the adjusted basis from the CA return. 

[Lakeview88]

Yes - I know the CA assets (which is just cash in the bank and some account receivables) need to be reflected in the new company.   I am trying to figure out where I would enter them in QuickBooks and 1020S forms.

[Critter-3]

If you had been using QB for the old company you can just continue using the same set up for the new company ... nothing you need to change since it is basically the same company just registered in a different state.  On the 1120-S those are only entered on the balance sheet if one is required.  Don't overthink this situation. 

[Rick19744]

Do you also realize that you liquidated your CA S corporation?

When you filed your final CA S corporation, you needed to file a form 1099-DIV for the liquidating distribution; all liquidated assets distributed to the shareholder should not have been reported on the K-1, but should be reported on the form 1099-DIV.

You then needed to determine a gain or loss on this investment and reported this on form 8949 and Sch D; the gain or loss is determined by comparing the liquidating distribution to your basis in the S corp stock.

Based on your facts, this was done in 2022, which may require an amended tax return.

Then when you established the new S corp, all assets contributed are then treated as a capital contribution.

[Lakeview88]

Yes.  I liquidated CA S-corp by filing the form 966 (Corporate Disolution or Liquidation).   On the form there is no $ but only the 1,000 common shares as the total number of shares outstanding at the time of liquidation.   Schedule D and form 8949 were also filed due to the sale of a company car which had a gain of $5,000, which added to the cash sitting in the bank account.   An asset transfer agreement was also done at the end of 2022 to transfer all assets and liabilities and the 1,000 shares from CA S-corp to NV S-corp.   

I am still using the same  QB company file of the CA S-corp and was hoping that I would continue the book-keeping in QB as @Critter-3 mentioned.    But just wanted to confirm how to treat the transferred assets ($53K total)

a)  in the 2023 tax return (1020S) which would be the 1st year for the NV S-corp and

b) if I need to do some journal entries in Quickbook to reflect the transferring of the assets

[Mike9241]

This seems like it's a federal tax-free reorganization under IRC 368(a)(1)(D). can't say what the rules are in CA.  

[Rick19744]

Form 966 is good to file.  This also puts the S corp on notice that you liquidated the company.

You need to meet with a tax professional as you can't just transfer assets from one entity to another for federal tax purposes; without potential tax consequences.

You had a taxable liquidation (you told the IRS you were liquidating on form 966) and a capital contribution.

This isn't a tax-free reorganization under Section 368 as there was no $$ paid by the acquiring entity for an acquisitive D reorganization.

In a divisive D reorganization, what you generally have is a corporation splitting into more than one entity; in the form of a of a split-up, a split-off, or a spinoff.

I don't believe you have a D reorganization; especially since you filed form 966 telling the IRS you liquidated.

This may qualify as an F reorganization, but you need to meet with a tax professional where you can have a one on one.