Buyout of S corp Shareholder by corp

[Rlmea]

A S-corp bought back the stock of a 23.625 % shareholder (booked as treasury stock). The other 3 shareholders held 47.25%, 23.625% & 5.5%. I know to allocate the bought out shareholder's numbers based on days of ownership, but would there be any adjustment to the %'s of the remainder shareholders numbers for the remainder of the year? They did not not contribute any personal funds. If there would be no adjustment the individual K-1's will not total the numbers on schedule K.

I have never dealt with this before.

Robin

[Uncle Sam]

Buyout of S Corp Shareholder by Corp

The remaining shareholders now have different ownership percentages from the date of the treasury stock. You've got to make 2 calculations of income/loss - one for all shareholders up until date of treasury stock - then one for the remaining shareholders in the ratio of their remaining (increased %) for the remaining part of the year.