all their shares to the third shareholder for property owned by the company, how would that play out? The property was never used to generate income for the business. Other factors that might be relevant. Company’s owners’ equity is negative and expecting a significant net loss for the year from normal operations.

Question #1: Does that property ever get depreciated for either books or tax purposes, since it was never used to generate income?

Question #2: Is the basis in the property the same as the original purchase price (assuming no upgrades)?

Question #3: What is the basis of the property for the two shareholders receiving it?

Question #4: If the property is worth less than the original purchase price, does the company recognize a loss on the disposition of the asset?

Question #5: How will this impact the K-1s for the shareholders?

TIA! Appreciate any feedback.