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Distribution of installment sale out of S Corp
01/07/09 11:34am PST, Viewed by asker 01/19/09 8:07am PST
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Total Views: 705
If I distribute an installment sale note out of an S Corp to the shareholders does this trigger the recognition of the deferred gain all in one year?
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All Replies: Answers (2)
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Answer
01/15/09 11:42am PST
Jmay, you have to remember that S corp is a passthrough entity. when this kind of situation arises, any and all unpaid proceeds shall be deffered untill they are being paid or realize.
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Solved!
01/16/09 4:30pm PST
distribution from s-corp or corp triggers recognition of gain unless it is a liquidating dividend. think of it as distribution at FMV unless the liquidate exception applies. This was correct 5 yrs ago but may have changed since then. research installment sale and liquidation.
