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Jimbojr
Level 2
February 8, 2021

Sale of Business in S corp

  • February 8, 2021
  • 1 reply
  • 2 views

SCorp has two remaining members. One Old member that had in the buy out that he would get X amount if the business was sold.

Is  the amount that was paid a cost of Sale, or a distribution  of dividend?

    This topic has been closed for replies.

    1 reply

    qbteachmt
    qbteachmt
    Level 15
    February 8, 2021

    "Is the amount that was paid a cost of Sale, or a distribution of dividend?"

    There is never Dividend for S corp and this is not a Cost of Sales.

    And it matters if this is Entity sale, or Assets/Liability, or only that one "old member" is selling? And his Basis, compared to "X" amount? Who is this sold to; another shareholder?

    Have you worked on business sales in the past, or is this your first?

    Don't yell at us; we're volunteers
      T
      Terry53029Intuit Community Champion
      Intuit Community Champion
      February 9, 2021

      An interesting article for you to read in tax easy terms. You may want to get a mentor on this one.

       https://www.fool.com/knowledge-center/tax-treatment-of-selling-a-subchapter-s-corporatio.aspx

        J
        JimbojrAuthor
        Level 2
        February 12, 2021

        Thanks 

         Ultimately I issued a form 8594  to notify the  seller of the purchase price.

        A good stickey wicket

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