Sales of a S-corporation

[aahelper1]

Dear All, 

Happy holidays everyone!

When I report the business sales of a s-corporation, on the final k-1s, do I need to take the shareholders basis into account when I report the gain and loss?

Thank you so much for your help!

Sylvia

[IRonMaN · Accepted solution]

Sale of business assets - no.

[aahelper1]

Thank you so much for your replied.  They sold the business, and it will be their final K-1.

[abctax55]

Sold the business meaning:

1) sold the assets?

or

2) sold the stock?

Different treatment depending on which one....

[aahelper1]

They sold the assets and goodwill, thanks!

[sjrcpa]

Followed by a distribution of all proceeds and a liquidation of the S Corp?

Otherwise it's not a final return.

[IRonMaN]

Picky, picky 😜

[aahelper1]

Thank for getting back to me on my question. 

You are right, it won't be the final k-1, just confirmed with them and now they want to keep the corporation open for a little longer maybe will close in 2024.

Therefore, I just need to report the sales of the business on the return, and pass the capital gain through the k-1s, and when the corporation liquidate then they will use their basis to figure out the gain or loss on their personal return?

Thank you in advance!

[aahelper1]

Thank you so much!!  Happy Holidays to you and your family!

[sjrcpa]

Therefore, I just need to report the sales of the business on the return, and pass the capital gain through the k-1s, and when the corporation liquidate then they will use their basis to figure out the gain or loss on their personal return?

Correct.

[aahelper1]

Thank you so much for your guidance!   

Happy New Year to you and your family!!

[sjrcpa]

You're welcome. Happy New Year!