Rachel_W
Expert Alumni
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

Business & farm

No, your S-Corp doesn't need to issue Form 1099-DIVs when shareholders take distributions.  Like you mentioned above, these distributions should be reported on each shareholder's K-1.

The distributions are not tax deductible to the S-Corp and they are not taxable income to the shareholders.  The distributions are a return of the shareholder's paid in capital and reduce their shareholder equity.

View solution in original post