Getting property out of an S corp without a taxable event ?

[Patricia Pretto]

I a seeking advice on getting my property out of an S Corp and into a regular LLC without triggering a taxable event.

We do not have any basis in the S corp with which to take distributions.

[Ashish Acharya]

The distribution is going to be taxable event. Depending when you bought the asset, you can report the sale at discount to avoid the cap gain but there will always be recapture even if you distribute at historical cost (basis). Again, this is just one way and only works for recent transactions. If your asset has appreciated a lot, you cannot defend distribution at the historical cost.