Scorp

Rodney7248 — Tue, 21 Jan 2025 02:41:24 GMT

I understand, Scorp reasonable salary how it is taxed, how are any other distributions taxed? Thank you.

Re: Scorp

Shannon B1 — Tue, 21 Jan 2025 22:47:05 GMT

Distributions are not taxable unless they are more than your basis in the S corporation.

A simple example of how basis is calculated

$10,000 Original Investment

$25,000 Plus/Minus: your part of the S Corp income/loss during your ownership period

($5,000) Less: your past distributions

$30,000 Basis in S Corp

Your distributions will be reported on Schedule K-1 provided by the S Corporation. You will enter it into TurboTax. Here are some additional instructions on how to enter your K-1.

The amount listed on your Schedule K, Box 1 will be taxable to you at your regular income tax rate. It is basically your part of the net income of the S-Corp.

For additional information see the below links

Tax Treatment of Distributions

S Corp Basis Calculation

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Scorp

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