Talk:Residual Income/Expense Reporting for Discontinued S-Corp.
From TaxAlmanac
Residual Income/Expense Reporting for Discontinued S-Corp. Where would you report residual income and expenses from a closed S-Corporation? Prospective client sold business in 2003, but continues to service some security contracts until they expire. Client receives minimal income and has some minimal expenses related to collecting this income. Obviously I need to find out why this income is coming to him and not to the new owners. I need some general guidance as to the proper reporting. I suspect amended returns may need to be done, as I believe a national tax preparation firm reported these transactions incorrectly. Any help will be appreciated.
This entity is no longer an S Corporation since he sold his business. Also, it appears he is no longer incorporated. He probably needs to report this income and expenses on a 1040 Schedule C. He could have elected to form another S Corporation. If this were the case, he could have reported it on a “short tax year” 1120S return.
The rules of incorporation go beyond my scope of knowledge. The information above is based on what I believe and not substantiated by documented facts.
