Discussion:S-corp, selling all assets as sfm, can it be closed out?

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Revision as of 21:03, 12 October 2009
Scottycoyote (Talk | contribs)
(thx jr, i'll loo)
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Captcook (Talk | contribs)
(Wouldn't you als)
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{{ForumReplyPost|UserID=Scottycoyote|Date=12 October 2009|Text=thx jr, i'll look that up when i get a break from these last minute extenders}} {{ForumReplyPost|UserID=Scottycoyote|Date=12 October 2009|Text=thx jr, i'll look that up when i get a break from these last minute extenders}}
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 +{{ForumReplyPost|UserID=Captcook|Date=13 October 2009|Text=Wouldn't you also end up with additional tax liability from the gain on the land when it is distributed to the S/H? I think the gain on the note would be recognized because you can distribute the note, but you can't distribute the deferred gain. If you could, the note wouldn't come out at FMV. Seems to make sense to me that way. }}

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Discussion Forum Index --> Advanced Tax Questions --> S-corp, selling all assets as sfm, can it be closed out?
Discussion Forum Index --> Tax Questions --> S-corp, selling all assets as sfm, can it be closed out?

Scottycoyote (talk|edits) said:

9 October 2009
client with a rental mobile home park and a rv park, selling all the assets to buyer with 10% down and financing balance for 10 years.

they are an s-corp (i didnt set them up originally, so dont yell at me lol).

they plan on keeping just one small piece of land to rent out to rv's (im not sure why this is so important to them but they want to remain in the "rental business").

so, they would like to simplify their life after this sell and do away with their corp, file a simple sch e for their remaining property and go from there. My question is, how does this deal need to be structured to make this happen? Can the corp just assign the note to them, and if so, does it effect the nature of the sfm, ie will they still be able to pay on the gain as they receive the principle payments or would they have to recognize all the gain up front. Are there any other pitfalls to this type of deal?


Im thinking about referring them elsewhere to handle the year of sale, i really want to know this more for my own info and to be able to give them a headsup on possible problems.

thanks

JR1 (talk|edits) said:

October 9, 2009
Something about the taxes being accelerated on a note after liquidation sticks in my mind, which is why I have one S alive who is merely collecting payments. Search and see if something pops on that. Installment S Corp might.

Scottycoyote (talk|edits) said:

12 October 2009
thx jr, i'll look that up when i get a break from these last minute extenders

Captcook (talk|edits) said:

13 October 2009
Wouldn't you also end up with additional tax liability from the gain on the land when it is distributed to the S/H? I think the gain on the note would be recognized because you can distribute the note, but you can't distribute the deferred gain. If you could, the note wouldn't come out at FMV. Seems to make sense to me that way.
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