ABC was formed as a calendar-year S corporation with Alan, Brenda, and Conner as equal shareholders. On May 1, 2019, ABC's S election was terminated after Conner sold his ABC shares (one-third of all shares) to his solely owned C corporation, Conner, Inc. ABC reported business income for 2019 as follows: (Assume that there are 365 days in the year.)
If ABC uses the daily method of allocating income between the S corporation short tax year (January 1-April 30) and the C corporation short tax year (May 1-December 31), how much income will it report on its S corporation short tax year return and its C corporation short tax year return for 2019?

Question

ABC was formed as a calendar-year S corporation with Alan, Brenda, and Conner as equal shareholders. On May 1, 2019, ABC's S election was terminated after Conner sold his ABC shares (one-third of all shares) to his solely owned C corporation, Conner, Inc. ABC reported business income for 2019 as follows: (Assume that there are 365 days in the year.)
  If ABC uses the daily method of allocating income between the S corporation short tax year (January 1-April 30) and the C corporation short tax year (May 1-December 31), how much income will it report on its S corporation short tax year return and its C corporation short tax year return for 2019?

Quizplus · Accepted Answer

The Answer of ABC was formed as a calendar-year S corporation with Alan, Brenda, and Conner as equal shareholders. On May 1, 2019, ABC's S election was terminated after Conner sold his ABC shares (one-third of all shares) to his solely owned C corporation, Conner, Inc. ABC reported business income for 2019 as follows: (Assume that there are 365 days in the year.)
  If ABC uses the daily method of allocating income between the S corporation short tax year (January 1-April 30) and the C corporation short tax year (May 1-December 31), how much income will it report on its S corporation short tax year return and its C corporation short tax year return for 2019?

ABC Was Formed as a Calendar-Year S Corporation with Alan