USA 336(e) Election

[Pamela Boyle]

I have a client who structured the sale of an S-corporation as a sale of assets and did a 336(e) election mid-year. In order to record the sale of the assets and the step-up in basis of the assets for the new shareholders, it would appear one would allocate the net income and other transactions on the tax return by the amount of time each shareholder owned the corporation. The tax software instructed me to close the data file and create a separate file for the new shareholders. I cannot see how this is going to function when filing the tax return. Any suggestions?