Question

1. If Beta Corp stops its business of selling jewelry and sells all of its assets except for a warehouse, is Beta required to file a federal tax return?

2.If Alpha Corp has no taxable income, does it still have to file a federal tax return?

3.Did Omega Corp have to file a tax return for the entire year, even though it was not formed until Dec 31, 2015?

Answer 1

1.yes, it has to file final federal tax return. C corporations should file Form 1120, U.S. Corporation Income Tax Return, and check the box that this is their final return. This form must be filed by the 15th day of the fourth month after you close your business. Corporations also need to file IRS Form 966, Corporate Dissolution or Liquidation, to report their dissolution.

S corporations should file Form 1120S, U.S. Corporation Income Tax Return for an S Corporation, and check the box that this is their final return. This form must be filed by the 15th day of the third month after you close your business. Corporations also need to file IRS Form 966, Corporate Dissolution or Liquidation, to report their dissolution.

Reporting asset sales: You will experience a taxable gain or loss when you liquidate your business's assets. You'll need to file Form 4797, Sales of Business Property, to calculate your gain or loss. After calculating the gain or loss on this form, you record the total from this form on your personal or corporate income tax return, depending on your form of business. (For more information, see IRS Publication 544, Sales and Other Dispositions of Assets.)

2. Yes it has to file return. A domestic corporation (including a Subchapter S corporation) must file an income tax return whether it has taxable income or not, unless it's exempt from filing under section 501.

A foreign corporation generally must file an income tax return if it:

-Engages in a trade or business in the United States, even if it has no income effectively connected with the conduct of a trade or business in the United States during the taxable year,

-Has income, gains or losses treated as if effectively connected with the conduct of a U.S. trade or business and subject to taxation under subtitle A of the Internal Revenue Code (relating to income taxes), or

-Doesn't engage in a trade or business in the United States at any time during the taxable year but has U.S. source income, and the withholding at source under Chapter 3 of the Internal Revenue Code didn't fully satisfy its taxation.

3.The answer is “Yes.”

Here’s why. Since you have an IRS-issued federal tax ID, you are in their system and the IRS will be expecting you to file an income tax return for 2015.