The two married shareholders live in a community property state.
You'll need to sign in or create an account to connect with an expert.
Under IRS regulations, disproportionate S Corp distributions are viewed as having a second class of stock. One of the requirements of an S corporation is that it only can have one class of stock. This, a disproportionate distribution can void your S corporation election, and potentially put you as a C corporation taxed at a corporate rate.
Under IRS regulations, disproportionate S Corp distributions are viewed as having a second class of stock. One of the requirements of an S corporation is that it only can have one class of stock. This, a disproportionate distribution can void your S corporation election, and potentially put you as a C corporation taxed at a corporate rate.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
KSG13
Level 1
MariaLK
New Member
kawishiwi
Returning Member
k2allar
Returning Member
dnkadin24
Level 1
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.