I've never dealt with a stock sale before, only have done net asset purchase. Hopefully someone out there can help me.
On 3/2/15 at 5 pm my client purchased 100% Stock of a single shareholder S Corp for $250,000. He gave the seller $50,000 at sale and seller financed the balance to him personally. Buyer is paying everything personally. Seller and Buyer agreed to IRC Sec 1377 Election to treat the tax year as if it were 2 tax years.
I have prepared the Seller's K-1 based on close of business 3/2/15 and given it to him. I am working on completing the 1120S. I'm confused about entries for Capital Stock, Retained Earnings on the Balance Sheet and how to record the activity in Sch M-2 AAA.
Down to the wire, I know.... Thanks for anyone who can help!
On 3/2/15 at 5 pm my client purchased 100% Stock of a single shareholder S Corp for $250,000. He gave the seller $50,000 at sale and seller financed the balance to him personally. Buyer is paying everything personally. Seller and Buyer agreed to IRC Sec 1377 Election to treat the tax year as if it were 2 tax years.
I have prepared the Seller's K-1 based on close of business 3/2/15 and given it to him. I am working on completing the 1120S. I'm confused about entries for Capital Stock, Retained Earnings on the Balance Sheet and how to record the activity in Sch M-2 AAA.
Down to the wire, I know.... Thanks for anyone who can help!