Can the section 179 expense be used 100% by stockholders of record at time of purchase when making a section 1377(a)(2) election to treat the tax year as 2 taxable years?

debbie · ‎12-06-2019

For 9 months of fiscal tax year, there were 3 stockholders. Their stock was redeemed and issued to 25 stockholders for the remaining 3 months of the fiscal year. Significant Section 179 purchases were made in the last three months. Can the allocation of the section 179 be 100% given to the 25 shareholders and 0% to the 3 shareholders if a Section 1377(a)(2) election is made?

TaxMonkey · ‎12-06-2019

Wouldn't it have to be? What other meaning would divide the year into two taxable years mean, if it doesn't mean to split the income and expenses into two different periods.

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debbie · ‎12-06-2019

Thank you.