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Distribution will be based on the amount actually paid to the deceased stockholder. And yes, the distribution has to be proportional in a S Corp. So the distribution before death and after death(to the estate) has to be proportional for each stockholder.
Let me know if you have any question.
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Thank you, XXXXX XXXXX'm not sure if I understand your answer yet. The Distributions (about 15K apiece) made in August were to each owner based on the percentage of ownership (33.33%). However, since one owner died in September, most of the lines on the K1 of the dead owner and the of the estate get divided proportionally to each other based on the date of death - regardless of how much income was made before and after the death. Does Line 16D get treated differently and show actulas? If so, why?