Question

Shareholder Ownership Change

Forum|Forum|2 years ago
March 14, 2024
1 reply
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Using Turbotax for Business, I have a S-corp ownership percentage change effective for January 1, 2023. The software interprets this as effective 11:59pm on the change date, so it calculates the percentages for 1/1/23 through 1/1/23, and then 1/2/23 through 12/31/23 (which does have a very small percentage variance). Changing the effective date to 12/31/22 causes an error in the audit check because the effective date is for a prior tax period.

Thoughts on how to override this nuance?

TurboTax Business Windows

T

ThomasM125

You can delete the shareholder, you will see an option for that on the Shareholder Information Summary:

You would then have to edit the other shareholder percentages.

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C

ctmorgan78Author

Changing the percentages is not an issue; it is how the software is interpreting the dates. The first image is where you select the date of the change in ownership (which in this situation is 1/1/2023). The second is where you then update the ownership shares. The software is bringing in the prior amounts for 1/1/23, and then only applying the update for 1/2/23 through 12/31/23.

PatriciaV

Yes, this is a program limitation. As long as you don't have ownership changes within those dates, you should have no issues. The income allocation calculations generally are made as of the ending date, not the beginning date.

@ctmorgan78

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