Company A and S Corp bough Company B another S Corp during the middle of the year. This was a sale of stock. There were 2 shareholders of the company purchased. The prior accountant would file a short year tax return for the corp up through the date of sale. After this the new accountant would file a return for the short year from the date of sale to 12/31/23.
My question is, if both corps continue to exist after the sale, what does the accountant after the sale have to do? Does an election have to be made to tax the existing corporation as a short year ? Do they file 2 returns? One for the short year of the purchased company and one for the existing company which bought the company? In order for the initial accountant to file a short year tax return in the first place, do they attach an explanatory statement to the tax return mentioning some type of election?
If a company is sold via a sale of the stock, it seems to me logical that the original accountant handling the taxes for the business that was sold would file the election to be taxed for a short year, then the next accountant would file a short year return for the remainder of the year and check the box as final. Then in the next year combine the activities into the purchasing EIN number return for the entire year. Am I wrong? Who needs to make the election and when? DOes it have to be done before the end of the year the business was sold?
My question is, if both corps continue to exist after the sale, what does the accountant after the sale have to do? Does an election have to be made to tax the existing corporation as a short year ? Do they file 2 returns? One for the short year of the purchased company and one for the existing company which bought the company? In order for the initial accountant to file a short year tax return in the first place, do they attach an explanatory statement to the tax return mentioning some type of election?
If a company is sold via a sale of the stock, it seems to me logical that the original accountant handling the taxes for the business that was sold would file the election to be taxed for a short year, then the next accountant would file a short year return for the remainder of the year and check the box as final. Then in the next year combine the activities into the purchasing EIN number return for the entire year. Am I wrong? Who needs to make the election and when? DOes it have to be done before the end of the year the business was sold?