I am looking to dissolve my C Corp (service business).
I saw another poster mentioned a Form 966 for Corporate Dissolution. In that form, it states "A corporation must recognize gain or loss on the distribution of its assets in the complete liquidation of its stock....the distributed assets are valued at fair market value..." The instructions for Form 1120 states that "A corporation hat has dissolved mus generally file by the 15th day of the 4th month after the date it dissolved."
At this point, the only assets on the books are some cash and old equipment and software that have de minimis value (e.g. a Thinkpad bought in 2007, 2008 Quickbooks, 2005 desktop copier, 2007 laserjet printer. All are pre 2009).
Any income or capital gains need to be recognized for the part-year Final Form 1120 (after dissolution) -- if distributed (given) to the shareholder? [Most of the assets above were depreciated using Sec179 -- if it makes a difference.]
The cash will be used to redeem corporate shares from the shareholder. The corporation's net asset value is slightly above shareholder's cost basis. But I think the C Corp has no income/gains with respect to the redemption of shares; but the shareholder would have to report a capital gains. Is that correct?
Does the C Corp has to issue a 1099-B or any other form(s) to the shareholder for the share redemption?
Normally, there is a Schedule G attached to F1120. I assume that is no longer necessary for the final return -- since there will be no shareholder left?
Anything else I need to look out for?
TIA