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Business & farm
Your understanding is correct.
A cash distribution to a shareholder is a taxable dividend to the extent of the corporation's current or accumulated E&P. If the current E&P equals or exceeds the amount of the distribution, it is a fully taxable dividend to the shareholder even if the corporation has negative accumulated E&P (Regs. Sec. 1.316-1(a)). In other words, if there is sufficient current E&P to cover all distributions made during the year, all distributions are taxable dividends.
You also need to keep in mind that E&P is not the same as retained earnings. There are many differences between the two.
Additionally, you will need to file form 1099-DIV for the dividend portion of the distribution.
Finally, to the extent you pay out a distribution that is a return of capital, you will be required to complete form 5452.
https://www.irs.gov/pub/irs-pdf/f5452.pdf
Also keep in mind the date of replies, as tax law changes.