Assume Joe Harry sells his 25% interest in Joe's S Corp., Inc. to Tyrone on January 29.Using the specific identification allocation method, how much income does Joe Harry report if Joe's S Corp., Inc. earned $200,000 from January 1 to January 29 and a total of$1,460,000 from January 1 through December 31 (365 days)?

Question

Quizplus · Accepted Answer

Joe Harry reports income based on his ownership percentage for the period he was a shareholder. From January 1 to January 29, the S Corp earned $200,000. Joe's 25% share of this is $50,000 (25% of $200,000).

Assume Joe Harry Sells His 25% Interest in Joe's S