Dissolution of partnership & unpaid income

[ingridmc]

thank you for the guidance

 

[rtuncap]

Your terminology is confusing. You are either a partner in a partnership, or a shareholder in a corporation. But you cannot be a partner in a corporation. Since you use the term "corporation" more than "partner," then I'll assume that you are a shareholder in a corporation.

As for notifying the IRS that the corporation has been disolved, the corporation will need to file a "final" federal tax return (either a Form 1120 or Form 1120-S). The "final" return election is merely a checkbox on the first page of the tax return. However, this will not actually disolve the corporation. Checking the "final" return checkbox will just notify the IRS not to look for future tax returns.

To actually disolve the corporation, that must be done at the state level, in the state where the corporation was formed. Since the rules and authorities varies by state, you will need to contact the state's Attorney General's office to find out the office or department that is in charge of incorporations. From that office, find out what forms are required to disolve a corporation. Once you have filed these forms, the corporation will officially be disolved. Keep in mind however, that the corporation will probably need to file a final state tax return as well.

The issue regarding the income not paid to you is a whole new conversation, so I will stick with the first question.

I hope this helps. Please let me know if I can be of further assistance.

Regards,
Russell Tuncap, CMA, CPA
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