what to do with remaining amortization of goodwill when sole proprietor switches to scorp

Thanks for clarifying. Let me start by pointing out what I'm certain y'all already know, for the sake of others who may read this thread and observe it helpful. So please bear with me on this.

A business that has a unmarried owner, such as a sole proprietorship or single member LLC is considered a disregarded entity by the IRS. Therefore all business organization income and expenses for this type of business concern is reported on SCH C as a office of the business organisation owner's personal tax return.

A S-Corp is considered a physically dissever taxable entity all by itself. Therefore an S-Corp reports all of it'due south business income and expenses on an IRS Course 1120-S Corporate Return. TO practise this with TurboTax, you tin can not utilise the same program that you use to file your personal 1040 tax return. You must utilise a completely split program call TurboTax Business concern, which is dissimilar from Home & Business concern.

TurboTax Business is non available equally an on-line product, or for MAC computers. It's for the Windows platform *but*. TurboTax business concern can be purchased directly from TurboTax at https://turbotax.intuit.com/small-business-taxes/ though you can probably find it significantly cheaper in a retail store in your local area. If yous buy it from TurboTax on line, you exercise NOT have to wait for the CD to be delivered. You have the choice of downloading the CD installation file to your windows computer immediately later you pay for information technology. Then you tin install the TurboTax Business organization program correct away and first using it immediately.

Okay, basically there are two things you need to do. Outset, you need to shut the sole proprietorship which you lot have already been reporting on SCH C as a role of your personal revenue enhancement render. THen  you will "open" your South-Corp business using TurboTax business. So here'south what you do first, to close your SCH C business organisation and study to the IRS that it is closed. Notation that most likely you will non be aware of it, but we "are" bookkeeping for the assets that you will be transferring to the South-Corp *when nosotros get to that point*. Also, do not leap the gun and east-file your tax return either. Information technology's vitally important that you not e-file "whatsoever" tax render, until yous take completed "all" tax returns (that'due south federal and land for both your personal return, and the corporate return) and y'all are satisfied and happy with the results.

• Closed SCH C Business organization

You lot need to study your business organisation every bit "sold or otherwise disposed of".

Start working through your business concern "as if" yous still own it. On the 2nd or third screen in select the option for "I sold, closed or otherwise tending of this business in 2016". If prompted for the date, enter the day after you lot last twenty-four hours of business in 2017.

If your business had no income in the tax year, yous tin not leave the business organisation income section bare. You lot 'must' enter a digit, even if that digit is a Cipher.

If you had no business expenses, so you can leave that blank and don't even take to piece of work that section through, if you don't desire to.

If your business carried an inventory, the end of twelvemonth (EOY) inventory must be zip. If it's not, and so in the COGS section indicate that yous removed all of the remaining inventory for personal use. that finer makes your EOY inventory residual, zero.

If your business had avails, and then you must show the disposition of those avails. In the Business organisation Assets department work through each individual asset on at a time, and select YES on the screen, "DId you stop using this asset in 2016?". So on the next screen, "Special Treatment Required?" if you sold the asset, select no and yous volition exist prompted for your sales information on that specific nugget. If yous did NOT sell the asset, click the Yeah push button. You must do this for each individual asset listed, even if it's already fully depreciated.

If you claimed any vehicle expenses in your business at whatsoever fourth dimension from the day you opened your business, then you lot must show the disposition of that vehicle. Work through the Business Vehicle Expenses section and signal that you stopped using that asset in the business concern, when prompted. Then show your disposition of that vehicle. About likely, you'll bespeak that information technology was removed for personal employ.

Once yous take done all the above, that will make the 2017 revenue enhancement year the last year yous will file a SCH C for this specific business. For you lot specifically creexl, once you lot have completed the SCH C yous need to select the FILE tab. And so click the "Print/SAVE For Your Records" tab and click the bluish PRINT button on that screen.

Then select "Tax render, key calculation worksheets" and click the blue "print preview" button at the bottom right of that window. This will open the selected pages in a PDF file. Print out a hard re-create of that PDF because you're going to need figures from some of those pages, when y'all start the 1120-Southward corporate render in TurboTax Business organisation.

Hollar back my way once you've completed all the above. If yous've not had whatever issues, we'll go on. If you exercise have problems, then nosotros'll deal with them before standing.

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Source: https://ttlc.intuit.com/community/business-taxes/discussion/dissolved-sole-proprietorship-to-form-s-corp-how-to-transfer-over-deductions/00/737433

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