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Entering change of ownership for an S corporation (1120S) in Lacerte

SOLVEDby IntuitLacerte Tax22Updated July 27, 2021

S corporations generally allocate items to the shareholder on a pro rata per-share per-day basis. Each item on Schedule K is divided by the number of the days in the tax year and again divided by the total number of active shares for the tax year.

Lacerte will only compute a weighted average if entries are made in Screen 7, Change in Stock Ownership. Otherwise, the program will assume that the percentage entered in Screen 6, Stock Ownership is the same throughout the year.

Follow these steps to enter general information for a change in stock ownership:

  1. Go to Screen 7, Change in Stock Ownership.
  2. Select the blue General Information section from the upper left navigation panel.
  3. Locate the General Information section.
  4. Enter the Beginning Date.
  5. Enter the Ending Date.
    • This is the ending date for the period in the year where there were changes in ownership.
 

The entire tax year must be accounted for when entering these dates and avoid overlapping dates.

  1. Enter the Total number of shares outstanding.
    • The total number of shares outstanding may only be entered in the first period if the number has not changed throughout the year.
  2. Proceed with the next set of steps below to enter information about changes in ownership for individual shareholders.

Next, you need to enter the actual changes in ownership during these periods for the individual shareholders. Keep the following information in mind:

  • The dates don't need to be entered for each shareholder if entered in the step above.
  • The number of shares can be entered or the percentage override.
  • You don't need to make any entries for any shareholder whose ownership didn't change during the tax year.

Follow these steps to enter the changes in ownership for individual shareholders:

  1. Select a shareholder (who had a change in ownership during the year) from the left navigation panel.
  2. Locate the Allocation Period Information section.
  3. Under the Period 1 subsection, enter the Beginning date and Ending date.
    • The Ending date is the date in which their ownership amount changed.
  4. Enter the Number of shares owned (-1 = none).
    • This is the number of shares they owned before the amount changed.
  5. Under the Period 2 subsection, enter the Beginning date and Ending date.
    • The Beginning date is a day after they had a change in ownership.
  6. Enter the Number of shares owned (-1 = none).
    • This is the amount of shares that they now.
  7. Repeat steps 1 through 6 as needed for each shareholder who had a change in ownership.
  8. Go to the Forms tab.
  9. Select Worksheets from the Forms view in the left navigation panel.
  10. Select Change in Stock Ownership Worksheet and review the information for accuracy.

Additional information

  • If the pro rata share percentage is calculated outside the program, you can enter the percentage in the K-1 allocation percentage (xx.xxxxxx) [O] field on Screen 6, Stock Ownership. This percentage will be applied to each item on the Schedule K-1.
  • You may also use Screen 33, Schedule K-1 Overrides to enter amounts instead of allocating by the percentage for each shareholder. If you use this method, you must override the amount on the applicable box for each shareholder to balance with the Schedule K.

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