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Posted by Tabernash on December 20, 2006, 1:07 am
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I have nagging concern on this issue. Client is the sole
shareholder of an existing C corp with a variety of
equipment assets, most of which are pretty fully
depreciated. In order to pursue a developing business
opportunity he, along with another person, have created a
new corporation for which they plan on making an S corp
election shortly. The new S corp will perform some of the
same services of the old C corp, but will also being engaged
in other businesses. The new S corp will acquire, at FMV,
many of the equipment assets of the old C corp. The old C
corp will continue to operate albeit in a reduced fashion.
Other than the C corp accounting for any income above basis
from the sale of these assets, I don't see a tax
consequence. Am I missing something?
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