Discussion:S-Corp Distribute Car & State Sales Tax
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Advanced Tax Questions --> S-Corp Distribute Car & State Sales Tax
Discussion Forum Index --> Tax Questions --> S-Corp Distribute Car & State Sales Tax
| 22 October 2009 | |
| A S-Corp is going to distribute a car to its sole shareholder. Adjusted basis for the vehicle is 15k, FMV is around 5k. I know the S-Corp won't be able to take the loss on the deemed sale because it is a related party. However, in order to transfer title/registration, the DMV requires the payment of sales tax. This obviously isn't a gift so I'm guessing some amount of sales tax should be paid. What should the sales price be? the FMV?
Should the shareholder actually write the S-Corp a check for the sales price to show sales tax auditors or can the amount simply be reported as a distribution? | |
| October 23, 2009 | |
| Yes, FMV is the sales price. Many states don't recharge for the tax between a solely owned corp and the owner. Check into that. | |
| 23 October 2009 | |
| Of course, the IRS will be looking to recapture some of the depreciation. They just might wonder, as a wild example, why a 2006 Mercedes has a $5k fmv. :-) I know, I know, it's the economy. | |
| October 23, 2009 | |
| Basis can get pretty high if you keep trading in and bear absolutely no relationship to FMV. | |
| 23 October 2009 | |
| JR1, You're right. Nothing like pristine records to prove it. | |
To join in on this discussion, you must first
log in.
