No, that's not what we are saying. Per your example:
Gross revenue - $100K
W -2 expense - $75K
Net corporate income - $25K
If you have other business expenses to reduce the $25K to zero, then your Schedule K-1 will have zero and you will only report your W-2 income on your individual tax return. However, distributions are NOT an expense. They will not reduce your net income.
If you do have net income, then that net income will be reported on your K-1 and you will report it on your individual tax return in addition to the W-2 income.
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