Discussion:Conversion of S corp to new S Corp - Required Forms
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Discussion Forum Index --> Basic Tax Questions --> Conversion of S corp to new S Corp - Required Forms
Discussion Forum Index --> Tax Questions --> Conversion of S corp to new S Corp - Required Forms
| 6 September 2008 | |
| My client ( a trucker), for marketing reasons, closed his S Corp "A" march 1, 07, and opened S corp "B" on March 2 07. An extention was filed for both S corps. Client wants to transfer assets and liabilities from "A" to "B".
Am I correct in assuminng this is Section 351. If so, how do i do this in proseries. Are there any other requirements I need to be concerned with. This is my first S corp conversion. Any assistance is appreciated. thanks in advance. | |
| September 6, 2008 | |
| If you respect the form of the transaction, it's a complete liquidation of A and (except in unlikely circumstances) a 351 contribution to B. I assume "closed" means dissolved and "opened" means formed. More likely, it's an F reorganization (or maybe a D or something). Did anything important happen in between? | |
| 6 September 2008 | |
| no nothing in between. Previous s corp was originated in rhode island. Family now lives in florida. Attorney advised client for marketing a cost factors, to set up a new s corp in florida.
I think i can transfer assets and liabilities at net book value . in other words, the beginning balance sheet of "B" is the ending balance sheet of "A". Do I have any 351 requirements? | |
Douglasholbrook (talk|edits) said: | 6 September 2008 |
| If you just liquidate A and distribute the assets (whether to the owner or to the B), you would trigger gain on the appreciation of assets distributed. You should do a "B" reorg to avoid this. B acquires the stock of A from the owner in exchange for the stock of B. B then liquidates A and ownes the assets and liabilities. | |
| 6 September 2008 | |
| Douglasholbrook thanks for for your thoughts... if the B reorg , and subsequent liquidation, takes place after the new Scorp was set up (3/07), would the final tax return be in tax year 2007 or 2008? | |
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