Hi everyone,
Have a question for final corporation tax return.
Client decides to close the C corporation. The ending balance sheet as of 12/31/2018 before closing is like this:
Cash 90
Start-up expense 36,000
Amortization -15,600
Total Assets 20,490
A/P 39,000
Loan from shareholders 17,900
Paid in capital 750
Return earning -34660
Net income for 2018 -2500
Total Liability and Equity 20,490
A/P 39,000 was legal fee and the attorney waivered it when C corporation made the dissolution.
When client made the dissolution, should he deduct unamortized start-up cost?
Final F/S (version 1)
Cash 90
Start-up expense 36000
Amortization -36,000
Total Assets 90
A/P 0
Loan from shareholders 17,900
Paid in capital 750
Return earning -34660
Net income for 2018 16,100
Total Liability and Equity 90
Net income for 2018 should be
Net income before dissolution: -2,500
Plus: A/P waivered 39,000
Minus: unamortized start-up cost :-20,400
Final net income for 2018 : 16,100
(version 2)
My co-worker says everything in the ending balance sheets should be zero in the final tax return.
The difference, my co-worker says, just plugs-in the final profit and loss.
What’s your opinion?
Thank you,