Since this is a final year return, your shareholders must have distributions to liquidate the business. To zero out your balance sheet, you distributed depreciable business property and/or cash to complete the liquidation. You need to enter the FMV of the assets distributed to the shareholders in the Shareholder Information section of the Step-by-Step mode.
To do this in TurboTax Business you can follow these steps:
- Within your tax return under Business Info and Shareholder Info click Edit for one of your shareholders and repeat for the other shareholder
- Ensure the Check this box if the was the last year this shareholder held shares in XXX
- Continue and click Done Entering Shareholders
- Continue through the Weighted Average Ownership Percentage Worksheet
- Mark Yes, the corporation made distributions to shareholders in 2022 and Continue
- Enter the FMV of any property and cash distributed
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