Business - Selling My S Corporation

Short Story
In general, an S corporation shareholder will prefer a stock sale because the resulting gain is typically treated as capital gain and taxed at favorable capital gain rates. By contrast, a buyer will often prefer an asset acquisition, which can cause part of the seller’s gain to be characterized as ordinary income rather than capital gain. Negotiate for a higher purchase price if an asset sale.

Should I be selling the stock or the assets?

Generally, a stock sale is more favorable to the seller since gains are taxed at the more favorable capital gains rates.
An asset sale can be less favorable because some asset-level gain may be taxed at ordinary income rates rather than capital gain rates.
If the company was ever a C Corporation, this answer may be different.

How do I compute the gain on a stock sale?

Gain on a stock sale is computed by comparing the amount you are receiving from the sale with your adjusted basis in the S corporation stock. The difference will be your gain.

How do I compute my S Corporation adjusted stock basis?

Very generally, basis is calculated by starting with the initial coast of the shares, increased by income and decreased by distributions. There are other adjustments.
See 'Shareholder's Instructions for Schedule K-1 (Form 1120-S)' for the detailed calculation.

How do I compute the gain on the sale of 100% of my s corp assets?

Determine the total sale price and any other consideration received.
Allocate that consideration among the assets sold
For each asset, compute gain or loss as allocated amount realized minus adjusted tax basis.
Determine the character of each asset’s gain or loss, this could result in ordinary income tax at ordinary rates.
Pass the resulting items through to the shareholders.
If the corporation distributes the proceeds, separately compute any shareholder-level gain or loss on the liquidation or distribution.

What happens to my suspended losses?

If you sell all of your S corporation stock while your stock basis is zero and your losses are still suspended,
Those suspended losses do not offset the stock-sale gain and are permanently disallowed.