qbteachmt
Level 15

Are you just now working on the 2019 1120S?

"In which case, contributed capital = FMV real estate less mortgage balance."

Wouldn't that make the loan payments distributions on behalf of the shareholders, even if paid to the mortgage company? But that should not happen without at least one of them getting payroll.

We don't know about the property ownership or laws in this State. It seems someone needs to know if there is the ability to use strategies such as wrap-around mortgage, quit claim deed, if the shareholders need to "sell" the rest of the property to the corporation, what the lender will require or if they will allow your shareholder(s) to assign the mortgage to a third party (the corporation), or if all of this discovery means it will blow up, anyway.

And I don't know what you could execute and backdate, legally, say to Dec 31, 2019, so it falls in that tax year.

 

I would recommend finding a mentor CPA locally that can help unwind this.

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