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    tmoodyq's Avatar
    tmoodyq Posts: 1, Reputation: 1
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    #1

    Apr 2, 2012, 08:05 AM
    taxes after closing an S corp
    Hello,

    I started an S corp. over 10 years ago. I'm the only person involved in the business. I was advised to establish it as an S corp. for tax purposes, etc. The only thing I do now is act as an independent rep for a company out of England. I simply receive a comm. My maket is automotive related and has moved to Mexico. I'm nearing retirement and want to disolve the business within two years. My accountant says the value of the company is @$70K. He says I will pay taxes on that money after I disolve it. The problem is, the company has not made enough money in the past several years for me to take a reasonable salary. It does not have more than 10K at any time. If he has valued it at 70 and I have less than 10, what do I do when it is dissolved? The government can and will take my personal property if they so desire! Do you have any advice?

    Thank you
    AK lawyer's Avatar
    AK lawyer Posts: 12,592, Reputation: 977
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    #2

    Apr 2, 2012, 12:59 PM
    Quote Originally Posted by tmoodyq View Post
    ... My accountant says the value of the company is @$70K. He says I will pay taxes on that money after I disolve it. ... It does not have more than 10K at any time. ...
    The book value is $70 k but the liquidation value is < $10 K? I'm thinking your accountant may be confused. I believe you would pay capital gains tax on the liquidation value.
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