I have a client who is wanting to close his C Corporation as he is being sued. We will be reporting the transfer of assets to him personally and reporting the sales on the return. Does my client also need to report the distribution of the cash on hand in the checking account as a stock sale on his personal return? If so can I use the retained earnings as the basis of the stock sale? This is a C Corporation that has only one officer to account for. I took over preparing this C Corporation in 2015 and am unsure about how to do this final step of the dissolution and how to calculate the basis.
His attorney has suggested he close the C Corporation to avoid a personal lawsuit. His attorney is advising him to possibly close the corporation if it will not cost him too much with the assets of the corporation. So now I just need to give him an idea of what it will cost him if he closes the corporation and this is the last part I need assistance to figure out for the client.