Solved: Sale of S corp assets to sole proprietor (related party)

nytcpa2012 · ‎12-06-2019

I am nearing retirement and want to close down my S corporation and operate on a smaller scale as a sole proprietor. My S corp owns a vehicle which has not fully depreciated (no section 179 or bonus depreciation was taken). If I simply transfer the vehicle to the same business now operating as a sole proprietor, does that constitute a sale? I want to avoid having a loss in the S corp that could not be taken since vehicle would belong to a related party. The undepreciated amount is more than the sole proprietorship (or me personally) would want to pay for it.

abctax55 · ‎12-06-2019

Assets come out as if sold at fair market value, with any gain reported passed out to the shareholder(s) via the K-1.

Given the related party scenario, I'd heavily document the FMV

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abctax55 · ‎12-06-2019

Assets come out as if sold at fair market value, with any gain reported passed out to the shareholder(s) via the K-1.

Given the related party scenario, I'd heavily document the FMV

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"

Sale of S corp assets to sole proprietor (related party)

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