I have a client who previously filed for Chap 7. Client owns an S-corp which that had money left in the account at the end of the tax year. The bankruptcy Trustee filed a motion seeking all the money in the business account at the end of tax year. However, the Chap 7 was filed before the year end.

Can the bankruptcy Trustee make a vaild claim on money in the business account of S-Corp? Also, how do taxes affect this bank balance? If the money was pre-tax then will the client have to release the money and then pay the taxes on this bank balance?