If I were to purchase someone's complete stock in an s corp today (they own 50% of the company), how would this year's profits be distributed? Do I receive everything from the purchase date forward, or is the year split by percentage of ownership? Also, what happens to retained earnings from last year? Does buying these shares entitle me to the previous owner's portion of retained earnings?
Answer
The profit would be allocated according to the ownership percentages and then prorated for the portion of the year they are owned for each shareholder. I can't answer your other questions without more information.
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