Allocating the ERC to a single Partner in an S-corp

Forum|Forum|3 years ago
January 17, 2023
2 replies
12 views

I am preparing an amended 2020 return for an S-corp client who just received their ERC in Jan 2023. The credit is assigned to Q4 of 2020, and my issue is the following: There were 2 partners in this S-corp, but one unfortunately passed away in early 2020. After inputting the ERC, the credit was applied to the K-1s of both the deceased and active partner. My understanding is that because the ERC is in relation to Q4, I need to allocate the entire credit to the active partner since the deceased was not present in Q4, and ensure that the deceased's K-1 is identical to what was filed for 2020.

Is there a way to set Lacerte to apply the credit to just one partner if the above assumption is correct?

Lacerte Tax

This topic has been closed for replies.

sjrcpa

Level 15

Enter the change in ownership dates and percents.

On the original return, was income/loss allocated on a per share per day basis? Or were the books cut off as of the date of death?

I don't know if you can change the allocation method on an amended return.

The more I know the more I don’t know.

rbynaker

Level 13

I'm curious what path you took to get from "one shareholder died" to "now there's only one shareholder."

Often one shareholder dies, and their estate becomes the new shareholder (so there's still two). Maybe something else happened in your case but that's likely the default without some sort of careful planning involved.

sjrcpa

Level 15

I was curious about that, too.

The more I know the more I don’t know.

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