They are reported in Box 16 with a code of D. The distributions are tax-free to the shareholders provided they have enough basis in the S-corp to absorb the distributions. (The distributions reduce shareholder basis in the corporation).
Thank you. Is there somewhere in the interview that this comes up or can it only be entered in form view?
Type shareholder distributions in the search box. If that doesn't get you to the right spot, then use Forms Mode.
I could not find where to enter shareholder distributions in TurboTax Business either, and it did not ask me in the step by step interview. I had to go to forms and enter it myself on the K-1 after seeing this thread but this is not how it should be. I just happened to catch this before submitting my taxes, what if I hadn't?! I thought everything was complete because I had gone step by step through the system. This is very concerning if Turbo Tax is not asking all the right questions. DanielV01 (or any TurboTax employee), can you please find out why the system is not asking for regular S corp distributions in the step by step walk-through? It did ask about dividend distributions which is not the same thing. I went back through everything trying to find where I missed and it was not there. I tried typing shareholder distributions in the search box and there was nothing that took me to the right spot either. If I missed it please tell me exactly where it is. Thanks!!
I did find it in shareholder info. I didn't have any changes to shareholders and there was nothing to indicate there were more questions so at first I didn't think I needed to edit the shareholders. There have been several of us that have asked this question, so I hope Turbo Tax notices that it is not as user friendly as it could be. I found the answer on a different thread for anyone else struggling with this I am sharing here:
To indicate that you have received a distribution:
Hello,
I have a question too: My S corp doesn't generate enough to take salaries. We take draws at end of year for health premiums paid out of the business's bank account and then at end of year, I take any thing left to repay me for the personal credit card expenses paid by me which are actually for the S corp. (I have all detailed receipts) This past year, my total draws including my year end draw estimated for those credit card expenses were more than the total of the all business expenses. Where do I put that figure on the tax return?
Thanks for any help
The S Corp has shareholder distributions. The draw is for an LLC owner. Enter "shareholder distributions" in the search box. It will give a link to jump to.
Thank you but what "search box" are you referring to? In my TurboTax software or here online?
He’s referring to the search box in your TurboTax software, in the upper-right corner of the screen – you’ll see a magnifying glass icon.