I am running two small businesses as one company. I have split the reporting using "class" in the past. Now I want to split the one company into two QB accounts. The current company is a S corp, and I have established a new S corp for the new company. I have set up the new company in QB.
Here is my question: how do I transfer the assets from the old to the new? I am 'spinning off' the new company to the same shareholders as in the parent company. From what I have read, this results in a tax free transaction. The shareholders are the same in both companies, with the same number of shares. The old company is spinning off two inventory assets to the new company. what are the accounting steps to do this?
This is a no cash transaction, so I cannot simply sell the asset to the new company. If I remove the asset from the parent company, what is the balancing transaction? (if I were selling the asset, I would increase cash). What is the transaction in the receiving company? Maybe just set the starting inventory balance to the same amount, but is there a balancing transaction as well?
Thanks in advance, Rick
