"Harlan Lunsford" <hlunsford[at]bellsouth.net> wrote:
- quote -

If I understand your example correctly, yes...at least in
effect, because the distribution to him must be shown as a
gain in the S corp which is then reported by "him" via his
K-1.

Mike Lewis, CPA

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Mike Lewis wrote:
- quote -

Hmm... well.. okay then.

Are you saying then, when my 100% shareholder of an S corp.
sells all other assets, but retains the truck which of
course has a book value really low due to sec 179, "he"
must recognize gain when he winds up the corporation and
transfers the SUV (only remaining asset) to him personally?
FMV in this case will probably be about 24,000 anyway,
while book value about zero.

ChEAr$,
Harlan Lunsford, GC and EA in LA

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"Mike Lewis" <jmpj[at]cableone.net> wrote:
- quote -

Not only would it be a dividend to the shareholder, but the
corporation would also be taxed on the gain (FMV less tax
basis).

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"David Haffey" <haffey[at]yahoo.com> wrote:

- quote -

No. Any difference between amount paid (in a sale) and FMV
would be treated as a dividend. If outright transferred, the
FMV would be a dividend.

Mike Lewis, CPA

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If a corporation fully depreciates it's vehicle over six
years, can it then transfer or "sell" it at book value
(zero) to a 100% stockholder, even though its FMV might be
$3,000 without recognizing any gain to the corporation, or
imputed income to the related party?

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