1120s sale

[TAXMAN]

TP and spouse own 100% of S corp. Operated for 10 months then Sold all assets including name to a new person. I have sold all the assets on form 4797. My question is what do I do with the goodwill. It was listed in the contract. Do I show that on the Schedule D of the 1120-s or somewhere else. Also isn't basis of the stock adjusted right before the sale takes place. There was also a small piece of real estate owned by the Corp that the TP and spouse kept. Should this be transferred to tp at FMV and reduce the basis in the stock. Help greatly appreciated

[BHoffman]

If they sold all assets, including the name, could this be a stock sale and not an asset sale?  

[BHoffman]

You might like this article

http://www.skodaminotti.com/blog/asset-deals-vs-stock-deals-for-pass-through-entities/

[TAXMAN]

The buyer and seller did not structure as a 338 election according to the paper work I saw.

[rfassett]

So the real question then, is who sold the assets.  And the answer to that question would be - the S-Corp.  Accordingly the sale would be reported on the 1120S and yes the goodwill would go on Schedule D.

You confuse the issue when you say " small piece of real estate owned by the Corp that the TP and spouse kept".  If this was owned by the Corp, then the Corp kept the real estate.  Unless the Corporation is being "wound up" and liquidated, there is no immediate and pressing need to get the real estate out of the Corp - unless the shareholders have already transferred the title to themselves.  In that case, the distribution would be at FMV.  All distributions will reduce the shareholders' basis.

[Lynn EA USTCP in Louisiana]

Filling out form 8594 will guide you to where each asset sold will be reported on the corporation's tax return