@SandalsCA my responses to your questions:
- No
- Yes
- Yes. Just report this on form 8949 which will then summarize on Schedule D. Once you report the liquidating distribution of $5,000 (as a sales price) and your tax basis of $5,000 you will arrive at zero gain or loss. Just call it S Corp liquidation.
*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.
