How to file a 1120s when one shareholder died.

[jrw_89123]

do I file two 1120s returns for the year based upon date of death?

[ToddL]

The S-Corp is a stand-alone entity; the death of a shareholder does not affect the S-Corp's filing requirements so you would still only file one 2017 Form 1120-S.

You will, however, have to allocate the Schedule K-1 items (Income, Deductions, Credits, etc.) according to the deceased shareholder's date of death. 

If the S-Corp's income and expenses were incurred evenly, throughout the year, then you can do a simple proration of K-1 items.  Example: If the deceased 50% shareholder passed on 6/30/2017, then their K-1 would reflect 1/4 of the year's activity - 50% ownership of 1/2 of the years income, etc..

If the S-Corp's income and expenses were not incurred evenly, throughout the year, then you would have to do an item by item allocation.

[jrw_89123]

Thanks for your response, this is what I thought too, but wanted to a confirmation from someone else.

[ToddL]

My pleasure!

[Anzhela1401]

Can surviving spouse sign tax returns of her deceased spouse’s S Corporation taxes, if the deceased was 100% shareholder and he had no employees, and there is no administrator or personal representative? Thank you.