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Discussion Forum Index --> Basic Tax Questions --> Asset transfer upon LLC termination
Discussion Forum Index --> Tax Questions --> Asset transfer upon LLC termination
LSC CPA (talk|edits) said:
| 3 August 2009
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| Client is an LLC (partnership) with a final return for 2008 - ceased operations 2/28/08. There were 3 members. 2 of the members formed a new corp 3/1/08 and use the assets of the old LLC in their new S-corp. What is the proper way to handle the disposition of the assets from the old LLC to the new S-corp, considering that only 2 of the LLC members are shareholders of the new corp that is using the assets now? A sale to the new S-corp or the shareholders at net book value? Distribution to the 2 members who formed the new S-corp? There were no formalities, documentation, etc. (of course). Can someone point me in the right direction (code, example, etc.). Thanks!
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Jctmstx (talk|edits) said:
| 3 August 2009
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| A sale to the new S-corp? Did one occur? Were the assets distributed or sold? These things are determined by the facts of the transaction. These transactions are convered under code sections 734,743,754.
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Jctmstx (talk|edits) said:
| 3 August 2009
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| Bye the way; they need to document the transaction.
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LSC CPA (talk|edits) said:
| 3 August 2009
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| Ha! These are 2 young, single guys working in one of their apartments, using all the same stuff. Just changed companies and ownership. But doing the same thing - web development. They never discussed anything on this level at all, or even thought about it. But thanks for the code section references. I'll take a look at those.
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Jctmstx (talk|edits) said:
| 3 August 2009
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| Then look at the tax return. There is most likely no basis left. I would probably just start from scratch with the S Corp.
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Harry Boscoe (talk|edits) said:
| 3 August 2009
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| Uh... Where do *you* think the one-third interest in "all the assets" that belonged to the third guy went to? Once again I prove that a preposition is something you can end a sentence with.
And where were these assets on February 29th? 2008 was a leap year...
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