As a general rule, the S corporation's ordinary income or loss and separately stated items are allocated based on the amount of stock owned by each shareholder on each day of the S corporation's tax year.

Question

Quizplus · Accepted Answer

This is correct according to the IRS guidelines for S corporations. The allocation is based on the percentage of stock ownership for each shareholder during the tax year.

As a General Rule, the S Corporation's Ordinary Income or Loss