How UltraTax CS calculates each shareholder's weighted average percentage

Alerts and notices

UltraTax CS uses Section 1377(a) to determine each shareholder's pro-rata share of shareholder items, unless an election under Section 1377(a)(2) or Regulation 1.1368-1(g)(2)(i) is made. You can view each shareholder's calculation in the Shareholder Weighted Average Computation dialog.

To calculate the shareholders' weighted average percentages, UltraTax CS performs the following steps.

  1. Determines the number of allocation periods for the S Corporation. UltraTax CS can calculate up to 24 allocation periods. The first period is determined by the beginning of year, and the remaining periods are determined by the unique dates of change entered in the Change of Ownership dialog.
  2. Establishes the apportionment ratio for the allocation period as a ratio of the number of days in the period over the total number of days in the tax year.
  3. Establishes each shareholder's ownership percentage for the allocation period as a ratio of the number of shares held by the shareholder over the total shares outstanding for the allocation period.
  4. Establishes each shareholder's weighted percentage of ownership for the allocation period by multiplying the apportionment ratio by the shareholder's ownership percentage.
  5. Sums the weighted percentages for each allocation period to establish the individual shareholder's total weighted average shareholder percentage.

Shareholder's weighted average percentage example.