S Corp Treasury Stock - Blinded by Assumptions

[JohnH]

Funny how we can be blinded by our assumptions at times.  A 4-member S-Corp  bought out one of the minority-interest shareholders this year.  Payment was made by the corp directly to the shareholder, and the purchase price exceeded the par value of the shares.  I had never encountered this situation (the S-Corp making the purchase vs other shareholders making the purchase)  and so had been assuming all along that treasury stock would create a second class of shareholder.  This had been rolling around in my mind for some time, so I decided that today was the day to research it (with the intention of asking a question here if my findings were unclear.) Turns out that it's just a matter of recognizing the treasury stock in the equity section with a PIC entry for the excess over par.  No different than accounting for the identical transaction in a C-corp.  

So this isn't a question - it's a comment. It's amazing what we can learn when we actually do the research instead of depending upon what we assume we know about a situation that may be new to us.  Lesson learned (or re-learned).

[Max W]

I have learned over the years, and especially nowadays, NEVER assume anything.  It is sometimes hard to do because every once in a while you slip up.

[Gail in Virginia]

Sometimes my problem is that I learned something so thoroughly years ago, and I was unaware (or forgot!) that it changed.  Always a good idea to check to make sure what you KNOW is actually correct.