There are a number of issues here that need to be addressed and documented so hopefully you received professional guidance when you changed entity type.
Some comments:
- Was the conversion handled by a state conversion?
- Was the conversion handled via the "check-the-box" rules?
- Have you received documentation from the IRS that the S election has been accepted?
- Depending on the response to bullet 1 and 2, this will have an impact on your basis in the S corp.
- You could have an assets-over approach
- You could have an assets-up approach
- Depending on which approach is used, the basis in your S corp stock and any physical assets will be different.
- As you can see, there are a number of issues that need to be addressed so hopefully you consulted with a tax professional
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
