Good day,
I am trying to close my small two-shareholder S-Corp, but I don't understand how to handle distributing tangible assets to the shareholders in TurboTax as part of filing the final 1120S tax return (and 1099-DIV, if needed). My understanding is that I am supposed to distribute the assets to the shareholders as "payment in full for the exchange of the stock". The company has zero cash while still having outstanding Loans from the Shareholders that greatly exceed any potential sale of its remaining tangible assets. Any insight would be greatly appreciated. Thank you very much.
The S-Corp has paid all of its liabilities with the exception of its outstanding Loans from the two Shareholders. All of the tangible assets were fully depreciated 10+ years ago, some as Section 179 and others as Special Allowance/Annual Depreciation. The majority of the assets have no real Fair Market Value and just need to be thrown away because it wouldn't be worth trying to sell the junk. The main exceptions are the two company vehicles and a trailer whose combined FMW is probably at most $4,000. The Capital Stock in the Balance Sheet is $1,000 while the accumulated Loans from Shareholders is around $75,000.
