Question & Answers
How would you close this Balance Sheet (B/S) asset on the Final Return for S-Corp? Cost: 60K – Depreciation 32K = Book Value 28K Auto Loan (Liability) – 22K Auto was sold to the shareholder (S/H) for 45K (FMV). How would you 1) zero-out this B/S item on S-Corp return, 2) where are proceeds flowing and 3) how would you show that S/H had assumed this liability (if needed)?
0 Votes
2304 Views
Follow
4 Followers
4 Followers
0 Votes
(1) Assuming the shareholder paid cash and there is no depreciation recapture is necessary to record the sale I would credit the cost $60K, debit the accumulated depreciation $32K, debit auto loan $22, debit cash $23K (proceeds minus loan) and credit gain on sale of car $17K.
(2) Proceeds of $45K first go to pay off the loan of $22K and the remaining goes to cash. If the shareholder is not giving the corporation cash, but instead is taking the car and related loan as a distribution then (1) and (2) are slightly different [instead of cash of $23K it's a distribution of $23K].
(3) There is no more debt on the corporation's books so there's no assumed corporate liability. He now has a personal liability (if he assumed the loan).
(2) Proceeds of $45K first go to pay off the loan of $22K and the remaining goes to cash. If the shareholder is not giving the corporation cash, but instead is taking the car and related loan as a distribution then (1) and (2) are slightly different [instead of cash of $23K it's a distribution of $23K].
(3) There is no more debt on the corporation's books so there's no assumed corporate liability. He now has a personal liability (if he assumed the loan).
Related Questions...
- Which washer/dryer will qualify for an energy-efficient tax credit?
- I always get so much money back at the end of the year, almost $4,000. I would rather have some of that in my check each week, how much should I claim on my taxes? I am a single mother, I own a condo where only my 4 year old son and I live. I make just under 30,000 a year. I am also a half-time student in college. Not sure what else you need to know to help me with this. Any advice would be greatly appreciated
- I am a Nonresident Alien and I live in Ensenada Baja California Mexico. I’m about to buy many electronics. Total value would be around $12,000 for my personal use. I am building my own house and I want to buy from SEARS in Chula Vista, California, but I don’t want to pay double tax (in the US and Mexico) since I am going to import the merchandise to Mexico. Is there any way to avoid the payment of taxes in Chula Vista?
- To my peers, Since schedule A's will be delayed, What are you doing and what are you telling taxpayers?
- What is the Hiring Incentives Act and how does it benefit small businesses?
