Final Return - S Corp

[Michell09]

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. 

[Anonymous_]

Previously taxed so there should not be a major issue.

I will page @Rick19744 and @Mike9241 

[Rick19744]

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.

[Mike9241]

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