I changed from a c corp to sole proprietor mid year how to report it

[davstav]

I changed from c corp to sole prop. on 8/31/2017 how do i file and show that

[DianeW · Accepted solution]

The date designated as the change date, as opposed to the filing date, depends on the filing requirements.

1. The C corporation return must be filed up to the date of the change and should be marked "final return."

2. The Schedule C for sole proprietor will start on the date of the change through the end of the year and into the future until or unless another entity is established.

The assets will move from the C corporation to the sole proprietor exactly as they are because they would be moving between related parties. Any asset that was fully depreciated will remain that way and any asset that has some remaining depreciation will continue under the sole proprietor until complete.  Each business will have a prorated portion of the annual amount for 2017.

Ordinary and necessary business expenses will stop or start for each business on the effective date.

• Use this IRS guideline for closing a business:  IRS Closing a Business Checklist