Discussion:Client transfering Scorp
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Discussion Forum Index --> Advanced Tax Questions --> Client transfering Scorp
Discussion Forum Index --> Tax Questions --> Client transfering Scorp
| 22 October 2009 | |
| Into another Scorp...both 50/50 owners....combine partner accounts and financials?
Or is there anything we need to be proactive about? | |
| 22 October 2009 | |
| are you asking about a merger? I can't remember the code sections, but there is a whole list of permitted tax free reorganizations | |
| 22 October 2009 | |
| Look at IRC Sec. 368(a)(1) for the list of permissible tax-free corporate reorganizations. | |
| 23 October 2009 | |
| Yes. One S into another. Same owners. I understand that it's a tax free merger, but as for the accounting and caiptal account.
Do they just get combined? Caiptal in particular. Thanks. | |
| 23 October 2009 | |
| If you can use a tax free merger, I think that all asset, liability and equity accounts would merge into one set of books for the first day of the merged entity. You need to eliminate any intercompany balance sheet amounts which should have mirrored each other in the first place. For tax basis books there would be no restatements of assets etc. since no gains were recognized. | |
| 23 October 2009 | |
| I am just not sure which subcat. it falls under. Same owners, just moving one company into another. D or F?
As far as their capital accounts, agree that they are just combined? Any other form than a final 1120s? Thanks again | |
| 26 October 2009 | |
| If we are just transfering the balance sheet from one company to the other, no change in ownership (2 members, 50/50) - Type F organization and the capital accounts are just merged together?
Capital accounts are my main concern. Thanks! | |
| October 26, 2009 | |
| Changing two corporations into one can never be an F reorganization. If it's accomplished by a merger, it's an A; if not, then a C or D, depending on exactly what happens. | |
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