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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Stock Sale
Expert: John Kirk, CPA
Date: 10/2/2008
Subject: Stock Sale
Question
Hi John,
A client of mine, a NY S-Corp is selling their stock, which is not something I usually come across. Please advise me on the following:
1. Since it's a stock sale, is there no bulk sale involved?
2. Does my client still file a final return?
3. How does the sale of the stock get reported on the tax return?
Any help or guidance would be highly appreciated.
Jeff
Answer
Since it is a transfer of stock ownership, you are correct in that it is not a bulk sale.
Under sec 1377 A 2, you split the year and file two 1120S. Not a final return as the S-Corp is still in existence.
The change in ownership is shown only on the schedule K-1 as a final K-1 on the departing shareholder. Nothing happens with the corporation.
Make sure you print "FILED PURSUANT TO SEC 1377 A-2" on the top of both forms.
You may have to file the second return by mail as your software may not allow you to file two returns electronically on the same tax payer.
John Kirk, CPA
www.johnkirkcpa.com
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