1120-S Dissolution, Final Expenses


M

mel

I am dissolving an S-Corp as of September 30, 2006. The
1120-S Return is due Dec. 15. In order to deduct all
payments on the final return: i.e. Payroll Taxes & my fees,
I assume they must be paid by Sept 30th. This means my fees
must be paid in advance. We also will have to file Amended
Returns for the 2 prior years since some large assets were
never recorded and depreciated. Again, I would have to be
paid before September 30 even if we file the Amendeds later.
Is my thinking correct?
 
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T

TxSrv

mel said:
I am dissolving an S-Corp as of September 30, 2006. The
1120-S Return is due Dec. 15. In order to deduct all
payments on the final return: i.e. Payroll Taxes & my fees,
I assume they must be paid by Sept 30th. This means my fees
must be paid in advance. We also will have to file Amended
Returns for the 2 prior years since some large assets were
never recorded and depreciated. Again, I would have to be
paid before September 30 even if we file the Amendeds later.
Is my thinking correct?
Work for the amendeds can be billed and even paid before
9/30, if on a cash basis. Otherwise, how closely held is
this entity? What does the dissolution resolution say? I
understand the need to close books as at 9/30 for proper IRS
filing, but for the practitioner to accomplish all that need
be done thru return due date, we may not know what the bill
will be. All but some portion of the checking account can
be timely distributed, if a final accounting as at 9/30
won't adjust those amounts much. So simply complete the job
thru all IRS filings. Services are then reflected in a
back-dated check to you and invoice for services worded
generally. Distribute the balance of checking.

I can't see any IRS tax issue here. The books as presented
to IRS in any audit will reflect what should have happened
and did, except for date your check was cashed, of no
consequence. That's why I asked how closely-held this corp
is. If small, the principals should understand there's more
work to be done after 9/30, and this is how we're doing
this. If fairly billed, there shouldn't be any complaint.

Fred F.
 
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