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I am the sole shareholder and CEO of a very small S corp which operates out of my residence. The main corporate asset is the "office suite", which takes up about 20% of the house. The company deducts a portion of the real estate taxes and utilities as well. I want to dissolve the corporation and have the suite naturally distributed back to me. How is the home office reported for tax purposes?


ANSWER


The BIDaWIZ Team's Answer:

The capital gain and corresponding depreciation recapture will be recognized when the actual property (i.e. home) is sold. Please also note that the Internal Revenue Code Section 121 capital gains exclusion may also be applied when the time comes, which will in turn reduce the gain.

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