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Discussion Forum Index --> Tax Questions --> Tax consequences of moving an S-Corp to LLC
Dsmucker (talk|edits) said:
| 20 June 2008
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| What are the tax consequences of moving an S-Corp to an LLC?
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JR1 (talk|edits) said:
| June 20, 2008
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| Same as liquidating any other corp. Recognition of gain/loss on liquidation, on all the assets.
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Dsmucker (talk|edits) said:
| 23 June 2008
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| Does there have to be gain/loss? Couldn't you just contribute in the assets to the LLC at book value?
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Jdugancpa (talk|edits) said:
| 23 June 2008
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| I suspect (though haven't researched it) that you could do a tax free reorg from a corp to an LLC electing to be taxed like a corp. But I suspect that is not what you are attempting to do. Assuming you are hoping to go from a corp to a partnership or sole proprietorship, assets will come out of the corp at FMV, not BV. The treatment would be like a taxable liquidation.
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Riley2 (talk|edits) said:
| 23 June 2008
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| The S corporation could contribute its assets and liabilities to a multiple member LLC under Sec. 721.
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JR1 (talk|edits) said:
| June 23, 2008
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| But it doesn't accomplish what the posters are usually after, which is to stop doing business with those assets in a corp form without gain recognition. It's like the same answer we always see (not from you Riley) on the 338(h)(10) election, which is pretty useless in our world.
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Dsmucker (talk|edits) said:
| 25 June 2008
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| So gain is recognized on liquidation of assets...once the assets are placed in the LLC they could be depreciated through S179...wouldn't this be a wash as any gain the shareholder has from the S-Corp liquidation be wiped away with S179 on the new LLC especially with the accelerated depreciation that is available this year?
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