S corp stock sale - do new owners file new 2553

[schirallicpa]

I understand that the corporation continues on and the S status would remain, but how do we tell the IRS that Sue and Sally are not longer getting the K-1s, and that Sammy is.  Or does it just get pushed thru in the year-end filing?

 

[BHoffman]

Sue and Sally will show zero ending ownership percentages on their K1s.  IRS does not match K1 forms like they do 1099s. I think there is a statement that shows ownership changes.   

[jklcpa]

The 1120S K-1 doesn't have all of the same blocks as a partnership k-1 does. From the 1120S K-1 instructions, it should report weighted averages for all owners for the year, and be marked "final" at the top for the terminated owner.  

Please see the 1120S instructions starting on the pg 20 under "Special Rules - Termination of a shareholder's interest" and then pg 22 starting at "Item F" for how to calculate the percentage of ownership to report.   Here's a link to the IRS for a pdf version of the instructions: https://www.irs.gov/pub/irs-pdf/i1120s.pdf

[schirallicpa]

ok - just wondering.  It seemed a little too grey.  

thanks!