the per share per day method is the default no election or statement is required to use this method. the close the year method requires the following per IRS reg 1.1377-1(b)
(5) Time and manner of making a terminating election—(i) In general. An S corporation makes a terminating election by attaching a statement to its timely filed original or amended return required to be filed under section 6037(a) (that is, a Form 1120S) for the taxable year during which a shareholder's entire interest is terminated. A single election statement may be filed by the S corporation for all terminating elections for the taxable year. The election statement must include—
(A) A declaration by the S corporation that it is electing under section 1377(a)(2) and this paragraph (b) to treat the taxable year as if it consisted of two separate taxable years;
(B) Information setting forth when and how the shareholder's entire interest was terminated (for example, a sale or gift);
(C) The signature on behalf of the S corporation of an authorized officer of the corporation on the Form 1120S filed by the S corporation.
(D) A statement by the corporation that the corporation and each affected shareholder consent to the S corporation making the terminating election.
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