Schedule K Line 16(d) reports distributions of cash or property that reduce the shareholders basis and are not typically taxable (unless the amount exceeds the shareholder's basis). This is the default for most S-Corps.
Schedule K Line 17(c) reports dividend distributions paid out of earnings (profit). These are not included on Schedule K-1, but instead are reported on Form 1099-DIV. ONLY S corporations who were previously C corporations OR who acquired a C corporation will have accumulated earnings and profits.
You may need to review your entries for the distributions under Business Info >> Shareholder Information.
- Continue past the list of shareholders to the question about distributions.
- Check the "yes" box and continue.
- On the next page, enter the amount of cash or property that was distributed.
- Continue to the next section.
Normally, distributions entered through this path are reported on Schedule K Line 16(d).
For Line 17(c), the program will automatically enter this amount if you:
* Enter total distributions and dividends on line A of the Shareholders Distributions and Dividends Smart Worksheet (Schedule K, above line 16d),
* Use the Schedule M-2/Retained Earnings Worksheet (activate by checking both "Yes" boxes above Schedule M-2), and
* The amount of dividend distributions will flow to this line.
Generally, the box on line C of the Schedule M-2 Smart Worksheet also needs to be checked, unless distributions exceed AAA.
If not using the Schedule M2/Retained Earnings Worksheet, enter the total of any dividends paid to shareholders from accumulated earnings and profits. Again, this only apples to S-Corps that were once C-Corporations.
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