I have a S corp that for 2006 there was 1 shareholder. In 2007 he added his wife, so now they each own 50% of the company.
For some reason, I am having issues with how to report this change on the return.
I know that Married couples (related) count as one shareholder. So if I just look at that, it seems that I don’t have to list the wife. But that also doesn’t make any sense, because she is another shareholder so she should receive her own K1. But then if I do that how to I account for how she received the shares, I am assuming that I don’t really need to make any adjustment since it is a married couple other than list her separately. If the new shareholder was not a relative wouldn’t I have to account for how they acquired shares, purchased or given?
Sorry if my question doesn’t make any sense I have been slammed today with work and meetings, and I know that I am tired. But I really want to get this return finished today.
Also, for all you who responded to my question about the Schedule L, I have taken all your advice into consideration for the next tax season I will require a complete set of books from partnership and corps. But it is too late to start for this season.
Thanks for any help you can offer.
Cris
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