Sole proprietorship to S Corp
Sole proprietorship to S Corp Accounts Rec
ievables, How do I handle to transfer
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PhoebeRoberts
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Since Sec 351 means you get carryover basis, I might copy the sole prop QB file, archive off all the transactions prior to the conversion date, and do a journal entry as of the conversion date adjusting all the old equity accounts to zero, with the other half being entries to new equity accounts for Common Stock (at par) and Additional Paid In Capital (for any excess). Then edit the Company Information to reflect the S-corp's information.
That'll move everything over with the minimum of work, and will give your tax preparer a good list of what was contributed for the required statement under the 351 Regs.
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