Solved: How do I record paid in capital to a S Corp of 20K and pay back to the share holder when a rental property is sold at a gain of 100K and will the 20K reduce the gain?
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How do I record paid in capital to a S Corp of 20K and pay back to the share holder when a rental property is sold at a gain of 100K and will the 20K reduce the gain?

 
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How do I record paid in capital to a S Corp of 20K and pay back to the share holder when a rental property is sold at a gain of 100K and will the 20K reduce the gain?

Paid in capital by a shareholder is not income. It is recorded on the balance sheet of the S-Corp as Paid in capital.

When the rental property is sold with a capital gain of $100k, the gain is reported as a capital gain on the S-Corp tax return. It is passed on to the shareholders through their respective Schedules K-1, each for their share of the gain.

The paid-in capital does not reduce the gain.

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Level 6

How do I record paid in capital to a S Corp of 20K and pay back to the share holder when a rental property is sold at a gain of 100K and will the 20K reduce the gain?

Paid in capital by a shareholder is not income. It is recorded on the balance sheet of the S-Corp as Paid in capital.

When the rental property is sold with a capital gain of $100k, the gain is reported as a capital gain on the S-Corp tax return. It is passed on to the shareholders through their respective Schedules K-1, each for their share of the gain.

The paid-in capital does not reduce the gain.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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