@SCORP2 wrote:
Does IRS consider the $14,000 a distribution or is that a third kind of income?
If you have $14,000 in Box 1 of your K-1 (1120-s), then you have $14,000 of ordinary income to report just for that K-1 income item (the $14,000 in Box 1 is not a distribution - distributions from S corporations are reported on Line 16 (D code) of your K-1 (1120-S).
It makes no difference whether or not you took a separate distribution; the $14,000 is taxable income.
