In addition to the discussion on Section 179, there are several other items that you should be aware of.
- Technically you should file form 966.
- Additionally, distributions of property from an S corporation is deemed to be treated as a sale at FMV. As such, you would reflect all of the assets as being disposed and any gain would be recognized.
- You should not reflect any of the liquidating distributions on the tax return; Sch K or K-1.
- Liquidating distributions are reflected on form 1099-DIV in box 9 or 10 as applicable.
- Also make sure you connect with the Secretary of State office where the business was incorporated. There may be some forms that need to be completed at the state level.
Unfortunately, regardless of the size of a business, there are generally some rules that get tricky.
*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.
