What do shareholders of S corporations have to synchronize in terms of ownership?

Shareholders of S corporations must synchronize their tax reporting responsibilities. This is crucial because S corporations are pass-through entities for federal tax purposes, meaning that the income, deductions, and tax credits of the corporation pass through to the individual shareholders, who report this information on their personal tax returns.

Each shareholder's share of the S corporation's income or loss is determined by their ownership percentage, but it is essential that all shareholders report this properly to avoid discrepancies with the IRS. The requirement for synchronized tax reporting helps ensure that all shareholders comply with tax regulations and accurately reflect their income derived from the corporation, maintaining the entity's pass-through taxation status.

In contrast, other factors like dividends, management roles, and ownership percentages, while important in their own right, do not require synchronization among the shareholders in the same way that tax reporting does. Each shareholder can have different roles and dividend agreements; they simply need to properly report their respective shares of income for tax purposes.