C-Corp Purchase & Tax Filing

[billbrennan]

A client came in & has purchased a C-Corp. This corporation began operations the first week of January 2024.
The owner (principle stockholder) sold the corporation to its new owner on 5/31/2024. NO TAX RETURNS HAVE BEEN FILED.

The new owner has obtained a new EIN as of June 1st, 2024 and has registered with PA as the new stockholder. The old owner has committed to file a tax return for the five months he's operated this corporation (ending 5/31/2024).

The new owner wants to do a corporation return with the new EIN starting June 1st, 2024. There has been no name change.

The question being:
Since the corporation has a new EIN, can we use June 1st, 2023 as the start date for the new corporation?
(Yes, we will have late filing.)
(Yes, it is a C-Corporation)

[TaxGuyBill]

What was sold? The shares of the corporation? Or just the assets of the corporation and the new owner registered a new corporation with the state?

If the corporation itself was sold (the shares), there is no new corporation and the new owner should be using the same EIN and it is all on the same tax return. Unless there is some special rule that I'm not thinking of at the moment.

[billbrennan]

The assets of the corporation was sold and the new owner registered a new corporation with the state. The sales agreement says nothing about purchasing corporate shares.

The only thing done by the new owner was to amend the corporate records with the state to show she's the new shareholder/owner.
She was able to get a new EIN.

My dilemma-
I don't know how to proceed as to include the first five months of sales, which was under a different EIN and owner into the 2024 tax return... OR do a tax return with the new EIN that shows the last six months of sales/expenses.

This is what happens when people who have limited knowledge prepare their own sales agreement without consulting a knowledgeable party.

The question is HOW DO I ADDRESS THIS DISASTER??

[TaxGuyBill]

The assets of the corporation was sold and the new owner registered a new corporation with the state.

The only thing done by the new owner was to amend the corporate records with the state to show she's the new shareholder/owner.

I'm confused. Those seem to be opposite things.

Buy assets and forming a new corporation is a new business. Amending the prior corporation to show she is the new shareholder is continuing the old business.

Which was it? Or are you saying she did BOTH?

Who is your client? The old owner? Or are they both your clients?

[DoubleO]

Let me guess. New owner did not want to get legal advice on setting up new corp.

Taxguybill has already pointed out the problem. She can ‘t have it both ways. If she wants to start fresh with new corp, will need to create and file new organizing docs. I would be wary doing what she did for liability purposes if intent was only to buy assets.