corp distribution and fiscal year

[Marie]

Corporation is on fiscal year, ending 3-31-10. No activity, but assets still sitting on balance sheet. Will the corp's return be an 09 or a 10 return? We want to make a distribution and I'd like to show it on the TP's 2009 tax return. Is this correct? I've filed an extension for the TP, so distribution can be shown on 2009.

[JohnH]

If the distribution took place in 2009, it will show on the taxpayer's 2009 tax return. If it takes place in 2010, it will show on the taxpayer's 2010 tax return. All of this is irrespective of the year showing on the corporation's tax return, although the return for the FY ending 3/31/10 would be the 2009 return. The year of a FY tax return is normally the year in which the FY began.

[OldJack]

If the distribution was paid before the FYE 3/31/10 it would be reported on the 2009 tax form. When you call it a distribution I think S-corp profit distribution and an S-corp is not allowed a fiscal year end unless they received prior permission from the IRS. Therefore, maybe you mean a liquidating distribution or C-corp taxable dividend? In any case assets distributed must be at fair market value with gain/loss recorded on the corporate books and tax return.