An S-corp is a pass-through entity. It does not pay taxes and all its profits/losses are allocated to its shareholders through the forms K-1. Each shareholder is taxed on their allocation of profits reported on the K-1, even if the profits have not yet been distributed.
On the other hand, when you receive distributions form the S-Corp, these distributions are not taxable.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
