Solved: Does k-1 Box 16E carry over?
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San-Diego
New Member

Does k-1 Box 16E carry over?

K-1 Box 16 E shows the repayment of loans from shareholders.  Does this amount carry over from year to year?

Also, when filing a personal tax return, does the owner of a corporation have to pay social security taxes on ordinary business income reported on K-1?

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Accepted Solutions
Rick19744
Level 11

Does k-1 Box 16E carry over?

Box 16 code E information is applicable to a specific tax year as noted by TGB.  

As a shareholder you need to be maintaining a basis schedule.  In the case of shareholder loans, you need to maintain two separate basis schedules; one for capital contributions and S corporation annual activity and a second for any loans to the S corporation.

The information on line 16 code E provides the shareholder with the necessary details to (1) agree that the amount reflected is what in fact was repaid during the current year, and (2) is necessary to determine any capital gain on a loan repayment that has a face value less than the outstanding loan balance.  This later issue will occur if a shareholder uses loan basis to take S corporation losses on their Schedule E.

*A reminder that posts in a forum such as this do not constitute tax advice.*

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2 Replies
TaxGuyBill
Level 9

Does k-1 Box 16E carry over?

I don't know this, but I really doubt if Box 16E would carry anything over.  That is only for your information for that particular year.

No, there isn't Social Security taxes on the income from a S-corporation K-1.  However, if you worked for the corporation and received money from the corporation, you are also required to receive a W-2, and the corporation is required to file (and pay) all of the associated payroll forms, including Social Security.  If that was not done, the corporation really need to go to a tax professional straighten things out.
Rick19744
Level 11

Does k-1 Box 16E carry over?

Box 16 code E information is applicable to a specific tax year as noted by TGB.  

As a shareholder you need to be maintaining a basis schedule.  In the case of shareholder loans, you need to maintain two separate basis schedules; one for capital contributions and S corporation annual activity and a second for any loans to the S corporation.

The information on line 16 code E provides the shareholder with the necessary details to (1) agree that the amount reflected is what in fact was repaid during the current year, and (2) is necessary to determine any capital gain on a loan repayment that has a face value less than the outstanding loan balance.  This later issue will occur if a shareholder uses loan basis to take S corporation losses on their Schedule E.

*A reminder that posts in a forum such as this do not constitute tax advice.*

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