I apologize, posted this too quickly:) The story is that there are two shareholders in the rental real estate S-corp, each owns 50%. In 2021 they have decided to dissolve the business, stopped renting back in May (no operational income since then) and sold all their rental properties with the last one being sold in November. One of the shareholders is going through a divorce and as a part of her settlement negotiation agreed to share her portion (50%) of proceeds from the sales of that last property in November with her husband (not a shareholder.) So, the business issues a company check to the husband for 25% of sales proceeds. How should I report transaction on the business tax return (final) and what form to send to the husband. I am thinking creating a K-1 form for him making him a partner as of the last asset sales day and report his portion of sec 1250 gain and depreciation recapture on that form as well full distribution amount.  There will be no income for him though. I would really appreciate your input as i am not sure how to deal with this. I am also entertaining an idea of using form 1099S for reporting of real estate sales but see issues with this form as well. Thank you!