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rvhatcher
Level 3

Check received after I dissolved my S-Corp, should I deposit it?

I dissolved my S-Corp to become a sole prop because I'm retired and it's much simpler.  I sent an invoice to an existing client and he sent me a check made out to my S-Corp, not to me personally.  I've formally dissolved the corp with the state but still have the checking account open.  Should I just deposit the check then transfer the funds to my SP account or should I go through the hassle of asking my client to reissue the check correctly?

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Accepted Solutions
tagteam
Level 15

Check received after I dissolved my S-Corp, should I deposit it?

Did your S corporation send the invoice to your client (which your client paid)?

 

It most likely will not make much of a difference if you are the sole shareholder, but you could simply include the receipt of this income on the final S corporation return (1120-S).

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4 Replies
tagteam
Level 15

Check received after I dissolved my S-Corp, should I deposit it?

Did your S corporation send the invoice to your client (which your client paid)?

 

It most likely will not make much of a difference if you are the sole shareholder, but you could simply include the receipt of this income on the final S corporation return (1120-S).

Mike9241
Level 15

Check received after I dissolved my S-Corp, should I deposit it?

if the invoice was issued before the S-corp was dissolved then I would agree with @tagteam. if the S-Corp's final return was filed, then you would probably need to amend it. this would be so you don't pay the self-employment tax on the income.  if issued after the dissolution, but the goods or services were delivered before this, I think S-Corp reporting would be proper. if the goods or services were delivered by you after dissolution then Schedule C reporting would be proper because of the self-employment tax liability. 

 

after saying all this, if you're willing to pay the self-employment tax on the income, even though the income could be reported on the S-Corp, the IRS should have no objections. 

rvhatcher
Level 3

Check received after I dissolved my S-Corp, should I deposit it?

The SP issued the invoice, but they paid to the vendor in their system, the S-Corp, rather than read the bold writing on the invoice to pay the SP.  I dissolved the S-Corp on June 30 but kept the checking account open just in case something like this happened.  I think I am going to deposit to the S-Corp account and pretend it came in before June 30.

tagteam
Level 15

Check received after I dissolved my S-Corp, should I deposit it?

There will most likely be no tax reporting statement so there is no danger of a mismatch.

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