I have had a Single Member LLC that I used for consulting purposes for over a decade. The LLC has no assets other than a bank account.
I recently landed a large contract and converted the LLC to be taxed as an S-Corp.
The calculated tax basis for the LLC before the conversion was $10,000. However, I only had $5,000 in the business bank account at the time of the conversion.
Should I use the tax basis of $10,000 or the actual cash in the business of $5,000 to calculate my initial contribution to the S-Corp?
