you must prepare the final tax return for Tom Oil, Inc. with Schedule K-1s for Tom and Donna. The Tax Return & Schedule K-1 for Tom M Oil Inc. must be completed using the forms for 2021

Your Client, Tom M and his wife, Donna M, are the owners of a heating oil delivery business which they operated for more than 20 years. They sold the business to a competitor on April 30, 2022, after the end of the 2021-2022 heating season. The business was operated as Tom M Oil Inc., an S corporation, which was owned 50% by Tom and 50% by Donna. They realized net profits from the operation of Tom M Oil Inc. from Jan - Apr 2022 of $45,000. The shareholder account balances for Tom and Donna as of Jan 1, 2022 were $0. The corporation's assets consisted solely of a customer list, service parts, oil inventory and three delivery trucks: - Truck \#1, purchased on June 15, 2020 for $80,000, cumulative depreciation $35,000, FMV of $70,000 - Truck \#2, purchased on March 20, 2018 for $45,000, cumulative depreciation $40,000, FMV of $60,000 - Truck \#3, purchased on October 15,2018 for $40,000, cumulative depreciation $35,000,FMV of $50,000 The corporation owned no real property. The competitor, Energy Star Corp. (Buyer), paid the purchase price of $495,700 plus the value of the oil inventory at cost on the day of the closing, allocated as follows: "Restrictive Covenant: As a condition of the purchase, the Buyer demanded that Tom M, Donna M and Tom M Oil Inc. agree not to own or operate, directly or indirectly, another oil company for three years, in exchange for $7,500. Tom M Oil Inc. ceased business as of April 30, 2022 after the sale and has distributed the proceeds to Tom and Donna in complete liquidation during 2022