Re: [taxchat] S Corp Liquidation

Have you reviewed the Contract of Sale?  Did the Corp sell the assets?  Did shareholder sell the stock in the corp?  You must read the contract to determine who sold what.  If the corp sold the assets, then the corporation is still "alive" until dissolved for the shareholder to show gain or loss on investment in corp stock?

 

Arnie

----- Original Message -----

From: Glenda Stockwell, CPA, PC

To: Taxchat

Sent: 10/14/2008 10:35 AM

Subject: [taxchat] S Corp Liquidation

I'm trying to help a client think through a process that I am not really familiar with....  I will of course suggest that they take their planning to an 'expert' in this field - But now I'm curious...  

 

S corp has sold all of it's assets for a profit which will pass through on a K-1 to the sole share holder. 

 

Shareholder had invested 20,000 in stock in the corporation....  How is this reflected in the overall picture?   Do they show a stock loss - limited to $3,000 capital loss per year?   Or does it somehow reduce the amount of sale profit on the K-1. 

 

Or maybe I'm not thinking clearly and this has 'no effect'.        ARRGH! 

 

 

Thanks! 

 

 

 

 

Glenda Stockwell
Certified Public Accountant
407 Central Ave - PO Box 164
Bedford, IA  50833
stockwellcpa@frontiernet.net

 

712-523-2173

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