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Election to Split Tax Year for 1120-S in Year of One Shareholder Selling Out - Irc section 1377(a)(2) election

dbrommcpa
Level 1

Can anyone with experience in this area tell me how they inputted the two separate tax years into the program? Is there a form somewhere to split the income out? The only help I've been able to find on Intuit's website is to override the amounts on the K-1's.

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5 Replies 5
dascpa
Level 8

You are not splitting the tax return.  The income is still reported for the entire year, but on the K-1 instead of using a weighted-average allocation for the year you are using an actual allocation.

dbrommcpa
Level 1

Thank you for your answer! How do you get the program to split it based on the actual percentages though? We do understand that we want to do that but don't know how to get the income to show up on the K-1's the way it should unless we physically override the numbers on the K-1.

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sjrcpa
Level 15

Are you trying to do a cut off the books allocation?

Or a per share per day allocation?


ex-AllStar
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dascpa
Level 8

On a 1065 we can do special allocations by $ or by %. On a 1120S there is no such thing as a special allocation.  So the way I've done it in the past on actual split-year is to override the Schedule K-1 and make sure I have a supporting workpaper in my files for it.

If you were to allocate based on # of days versus an actual year-split you would go into the Weighted Average Ownership Percentage Worksheet. Then the software will do the math for you.

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dbrommcpa
Level 1

I am trying to do a cut off the books allocation

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