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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I have an LLC taxes as an S corp. there were 2 owners at the

Customer Question

I have an LLC taxes as an S corp. there were 2 owners at the beginning of the year and 2 entered mid-year. Is there a way to allocate the income in 2 segments according to the days of ownership?
JA: Thanks. Can you give me any more details about your issue?
Customer: LLC taxes as S corp. 2 owners 1/1- 7/12/15. 2 additional members entered the LLC on 7/13/15. We would like to allocated the income and expense for the period 7/1-7/12/15 to the original members and the income and expense from 7/13-12/31-15 to the 4 members.
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Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

Correct - all items reported on K1 must be allocated not only according to number of shares - but also according to the time shares were owned.

Expert:  Lev replied 9 months ago.

If S-corporation received its income evenly throughout the year - we may simply prorate income according to the time period and then according to number of shares owned during each period - and combine results on K1s.

If income was not received evenly - you might want to prepare internal tax return separately for each period and generate separate sets of K1s.

However for the filing - you will still use combined tax return for the whole tax year.

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