S Corporation shareholder buyout

[mdpleiman]

Two person S Corp. One shareholder buys out the other on 8/1/24.  They are making the election to closeout the books as of 8/1/24.  There was a $ 40,000 loss at that point of time and by the end of the year there was a $ 15,000 profit.  The $ 40k loss was know and built into the buyout price.

One K-1 will have a loss and the other will have a profit.

Any tips on how to make proseries "flow" this entry?

Thanks

[IRonMaN]

Normally you allocate based on days owned.  But you can elect to report the actual earnings for the period but using the special allocation (or whatever they call it) on the ProSeries K-1 worksheets.

[dkh]

Unless ProSeries has improved this option  (hahahahaha) since I did a 2018 return that elected to treat tax year as two separate years.....you'll have to do overrides on the K1s to force the numbers

ProSeries does have the Sec1377 election  

[Ephesians3-14]

If you have a year ending August 1, 2024, that tax return is due within 75 days. So it’s already late.

[IRonMaN]

Based on how I read the post, I believe the one partner was bought out on 8/1 instead of the business ending on 8/1.

[mdpleiman]

Yes, bought out.  So the S Corp continued business. So just one tax return with a few overrides to make it work!