S-Corp election

[ILLMAS]

Let's say a single member elected to be treated as S-Corp and it was approved, during the year, someone wants to be part of the S-Corp, would a new election have to be submitted to include the new member?  Or just prepare an additional K-1?   I am trying to figure out if we have to give notice to the IRS.

Thanks

MAS

[Catherine]

Once it's an S-corp, it can sell shares to new shareholders as long as there is only one shareholder class and the total number of them does not go above 100.  You'll need to do special allocations the first year to deal with when the new s/h came in, and remember to start tracking the basis as well.