By Jason Watson, CPA
Posted Wednesday, November 1, 2023
When you revoke S corporation status, you will trigger a taxable event. A potentially big one. Upon revocation, assets are distributed to the S Corp shareholders at fair market value. Cash is easy. An automobile is generally not a big deal. But real estate can kick your butt. Therefore, before we put out the flame, a review of the assets and fair market values must be done. To pay capital gains on appreciated assets when you have cash from a transaction is easy. To pay capital gains on appreciated assets when a cashless revocation occurs is brutal.
Jason Watson, CPA, is a Senior Partner of WCG CPAs & Advisors, a boutique yet progressive tax,
accounting and business consultation firm located in Colorado serving clients worldwide.
Taxpayer's Comprehensive Guide to LLCs and S Corps 2023-2024 Edition
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Taxpayer's Comprehensive Guide to LLCs and S Corps 2023-2024 Edition