Based on the limited facts, a few comments:
Yes..... the tax year really does matter.
- A shareholder who disposes of stock in an S corporation is treated as the shareholder for the day of the disposition. Regulation Section 1.1377-1(a)(2)(ii).
- Not sure what your purchase document says, so hopefully the date of sale was December 31, 2022. This means that you would not have any ownership in 2023; no one day K-1 if this is the wording in the contract.
- Your facts lead me to believe you technically owned stock for one day in 2023; meaning the sale was technically 2023.
- Hopefully you have maintained your basis in the S corp stock as this is the only way to determine your gain or loss on the sale.
- Additionally, your K-1 should have been marked final.
- You should have completed a form 7203
- Your gain or loss would be reported on your 2022 tax return; unless you are being paid over time, or the sale technically occurred in 2023 as noted above.
- If the contract states that the purchase was on Jan 1, 2023, then technically you should still receive a one day K-1 in 2023 and the new shareholder's took possession on Jan 2, 2023.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
