Assume Joe Harry sells his 25% interest in Joe's S Corp., Inc. to Tyrone on January 29. Using the daily allocation method, how much income does Joe Harry report if Joe's S Corp., Inc. earned $200,000 from January 1 to January 28 and a total of $1,460,000 from January 1 through December 31 (365 days)?

Question

Quizplus · Accepted Answer

Joe Harry's share of the income for the 28 days he was a shareholder is calculated as follows: ($1,460,000 / 365 days) * 28 days * 25% = $29,000.

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