Tax on sale of s corp stock question
Last year was the first year that I prepared our tax return. Simple using turbotax. This year I have a wrinkle. I owned 12.37% of an s corp until Aug 26, when I sold 6% for $78k. So i still own roughly 6.37%. This year's K-1 shows my ownership at 10.20% - which is the prorated pct based on approx 8 months at 12.37% and 4 months at roughly 6.37%. K-1 shows beginning stock basis at 26.5k, ending basis at 78.7k. I also have a 25k note to the corp resulting in a 25k debt basis.
I'm trying to understand how to figure the tax on Aug 26th sale before I dive into turbotax. I've seen some info online indicating that I should only use the beginning yearly basis when calculating the gain. It seems like a proration between the beginning and ending basis would be appropriate.
I haven't started our return in Turbotax yet, but I assume Turbotax can handle this with the correct inputs. But I want to make sure I understand what I'm entering. Anyone have experience in computing gains from mid year sales of s corp stock?
"And in the end, it's not the years in your life that count. It's the life in your years" - Abraham Lincoln