I have a client with an existing C-Corp. They are acquiring the assets of another company and wish to convert the C-Corp to an LLC, most likely as just a partnership (though S-Corp election is not off the table). The target company's assets are in the same industry as existing C-Corp and new LLC.
I've been on the selling side of larger deals, not buyer's side, and not with a simultaneous change in entity type. I want to verify some thoughts and see if anyone notices I am missing anything critical:
-C-Corp will be liquidated using one of three methods, but ultimately flows through to two shareholders (each at 50% ownership), assets liquidated at FMV net of liabilities
-Target company's acquired assets should pass directly to LLC, not to C-Corp, unless a valid reason for doings so is identified
-Am I correct that of the three primary methods of transferring existing C-Corp assets/liabilities (shareholder stock transfer to LLC and then LLC exchanges stock for the Corp's assets/liabilities; C-Corp direct transfer of assets to LLC or interest, then C-Corp liquidates LLC interest to shareholders; or, corporate liquidation directly to shareholders and shareholders contribute to LLC), that corporate liquidation directly to shareholders can expose the shareholders to the liabilities, whereas the other methods directly transfer the liabilities to the LLC and thus still shelter the owners?
-LLC receives step up in bases of transferred assets and may capitalize and depreciate as normal...but does Bonus or Sec. 179 apply? I feel like I read transfers of assets from a related party do not qualify for bonus/179, but not certain this qualifies as related party per circumstances.
-Since target company is specific (not a general search--one company was identified from day one) and in same industry as existing C-Corp, am I correct in interpreting that investigatory expenses may be immediately expensed? If correct, does the expense go the C-Corp or what will be a newly formed LLC?