Thank you for the replies. Hopefully my last question regarding this:
The S corp will file short year from 1/1 until sales date. S corp stockholder will show the stock sale on personal return. The C corp will also be filing a short year from purchase of stock until 12/31. As the purchase of stock is not part of the corporate books, can the c corp issue return of capital distributions or are all distributions considered dividends as the new stockholder did not actually contribute cash to the corp?