topic Final Return - S Corp in Get your taxes done using TurboTax

Final Return - S Corp

Michell09 — Mon, 21 Aug 2023 20:27:15 GMT

Hi,

I am a Georgia S Corp with only 1 shareholder. A small payroll company who has been struggling since Covid. No business earnings for the past three years. As a result, this is my final business tax return for tax yr 2022 for which it is marked on my business tax return. I am not sure to why the retained earnings are not showing on my Sched K. Unsure if it’s because I was already taxed and that amount of retained earnings are showing on Sched M-2 and that is why the distribution amount is not going on my personal taxes? Not sure if the Turbo tax software is actually processing correctly or am I suppose to add the undistributed previously taxed amount onto my personal tax return 1040(Home/Business). Hopefully someone can assist or

at least answer my questions.

Re: Final Return - S Corp

Anonymous_ — Tue, 22 Aug 2023 15:57:59 GMT

Previously taxed so there should not be a major issue.

I will page @Rick19744 and @Mike9241

Re: Final Return - S Corp

Rick19744 — Tue, 22 Aug 2023 16:16:19 GMT

Not exactly sure what you are asking, as retained earnings are never reflected on Schedule K. Possibly you meant to say Schedule L?

There are a number of issues that come into play on a final return:

Your ending balance sheet should be zeroed out.
If you had any liquidating distributions, those should be reported on a 1099-DIV box 9 or 10 as applicable and NOT on the K-1.
Your K-1 should only reflect any ordinary income or expenses as applicable
Since obviously we can't see your return, you may have a book gain or loss to zero out the balance sheet and then have a M-1 for this book to tax adjustment.
Distribution of tangible personal property is treated as a sale, so this needs to be considered if applicable. Any gain on this distribution will be reflected on your K-1 and increases your tax basis in your S corporation stock.
Hopefully you have maintained your tax basis in the S corporation stock. This is key in being able to determine the overall gain or loss.
Don't forget you may have some state of Georgia filing requirements; ie Secretary of State.

Re: Final Return - S Corp

Mike9241 — Tue, 22 Aug 2023 16:26:48 GMT

wrong schedule - schedule k on the 1120-s does not report retained earnings

at best it would be on schedule L - but in theory if it was always and s-corp and all the assets and liablities are gone it would likely be zero

the other place might be the m-2 but again just like above it likely would be zero

look at schedule B line 11. - there should be nothing left so schedule L and m-1 are not required.

also retained earnings are not reported on your k-1.

so i'm unsure of what you are looking for.

maybe if you would clarify the issue, we couls provide additional advice