S Corp Dividend

mw33 — Wed, 13 Jan 2021 02:42:59 GMT

Hi,

I am a solo self employed contractor and my business is registered as S-Corp. I have a corporate brokerage account that pays dividends for the cash account, however those dividends get reported to me on a 1099 Information only form (not on a 1099-DIV since this is an S Corp account). My question is do I need to report the dividends on my 1120S return? What are the tax implications if I close the business in future and take the entire balance from that account as distributions? Thanks

Re: S Corp Dividend

M-MTax — Wed, 13 Jan 2021 02:49:17 GMT

Whose tax id number is on the form? You're going to have a matching problem if it's wrong. If the corp's EIN is on the 1099 report it there and I'd report it on the 1120S anyway because it's the corp's income derived from corp cash.

Re: S Corp Dividend

Mike9241 — Wed, 13 Jan 2021 09:50:57 GMT

assuming the tax ID # on the a/c is that of the S Corp. it is the S Corp that reports the dividends. the gross gets reported on schedule K line 5a and the qualified dividend amount gets reported on line 5b.

those numbers flow through to your k-1

upon liquidation appreciated assets are deemed sold at fair market value.. in effect you get taxed on the appreciation. if any. then the FMV of the stock distributed becomes your basis. if you are planning on liquidating the corp the least costly to you would be to distribute the cash proceeds from actual sales to yourself. if you have basis in your s-corp then the cash distributions will reduce it and as long as your basis remains positive those cash distributions are tax free.

note that the IRS wants form 966 filed

A corporation (or a farmer’s cooperative) must file Form
966 if it adopts a resolution or plan to dissolve the
corporation or liquidate any of its stock.

When To File
File Form 966 within 30 days after the resolution or plan is
adopted to dissolve the corporation or liquidate any of its
stock. If the resolution or plan is amended or
supplemented after Form 966 is filed, file another Form
966 within 30 days after the amendment or supplement is
adopted. The additional form will be sufficient if the date
the earlier form was filed is entered on line 11 and a
certified copy of the amendment or supplement is
attached. Include all information required by Form 966
that was not given in the earlier form.
Where To File
File Form 966 with the Internal Revenue Service Center at
the address where the corporation (or cooperative) files
its income tax return.
Distribution of Property
A corporation must recognize gain or loss on the
distribution of its assets in the complete liquidation of its
stock. For purposes of determining gain or loss, the

distributed assets are valued at fair market value.

Re: S Corp Dividend

mw33 — Wed, 13 Jan 2021 16:45:27 GMT

It is the corp tax id on the form. Thanks for your reply

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