Sale of S Corporation Stock: Section 1.1368-1(g) Election

A little know election available to S corporations is the Regs. Section 1.1368-1(g) election. The election is generally available when a shareholder disposes of or redeems 20% or more of their shares during the year.
This election allows the S corporation to calculate a shareholder's share of income & expense as if the year consisted of two or more tax years depending upon how many qualifying dispositions occurred during the year.
In this video, we review an example where an S corporation shareholder sold 46.67% of his stock to an existing shareholder. The disposition was a qualifying disposition under the regulations, and the S corporation & shareholders elected to make the election for the 2022 tax year.
For more 2022 tutorials on Form 1120-S, please see the following playlist:
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