Assume Joe Harry sells his 25percent interest in Joe's S Corporation, to Tyrone on January 29. Using the daily allocation method, how much income does Joe Harry report if Joe's S Corporation,earned $190,000 from January 1 to January 29 and a total of $547,500 from January 1 through December 31 (365 days)?

Question

Quizplus · Accepted Answer

Joe's share of the income for the period he owned the interest is calculated by taking 25% of the income earned from January 1 to January 29, which is $190,000. Therefore, Joe reports 25% of $190,000, which is $47,500.

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