How should I record transfer of assets from my dissolved S-Corp to my LLC?

[JPD1224]

I am the owner of a CT-based single-member LLC and the sole shareholder DE-based S-corp. I dissolved the S-corp at the end 2021.

On 12/31/2021 I received a cash + property distribution (depreciated value of computer equipment) that was reported on my K-1.

The distribution exceeds my stock basis by the amount of the property distribution and is considered taxable according to my research.

The S-Corp computer equipment was acquired (on paper) by my LLC at a cost equal to the distribution and claimed as an expense for 2021.

In preparing my personal taxes, my thinking is record the sale as a complete disposition with a sale price that exceeds my cost basis by an amount equal to the depreciated value of the computer equipment. Given that the property distribution was reported on my S-Corp tax return in the manner described, is my thinking correct or should I record the S-Corp disposition and LLC expense in a different way? Thank you

[RobertB4444 · Accepted solution]

Your thinking is correct as far as entering the sale provided the K-1 just has the distribution as a distribution of property and not as a taxable distribution.  In that case you'd be paying taxes on it twice.

[JPD1224]

Thank you Robert for confirming. Greatly appreciated.