topic K1 income has never been received. Why is it taxable? If so, why do people become shareholders of S corp? in Business & farm https://ttlc.intuit.com/community/business-taxes/discussion/k1-income-has-never-been-received-why-is-it-taxable-if-so-why-do-people-become-shareholders-of-s/01/398640#M14944 Tue, 04 Jun 2019 19:51:02 GMT bamboo92 2019-06-04T19:51:02Z K1 income has never been received. Why is it taxable? If so, why do people become shareholders of S corp? https://ttlc.intuit.com/community/business-taxes/discussion/k1-income-has-never-been-received-why-is-it-taxable-if-so-why-do-people-become-shareholders-of-s/01/398640#M14944 Tue, 04 Jun 2019 19:51:02 GMT https://ttlc.intuit.com/community/business-taxes/discussion/k1-income-has-never-been-received-why-is-it-taxable-if-so-why-do-people-become-shareholders-of-s/01/398640#M14944 bamboo92 2019-06-04T19:51:02Z An S-corp is a pass-through entity. It does not pay taxes... https://ttlc.intuit.com/community/business-taxes/discussion/an-s-corp-is-a-pass-through-entity-it-does-not-pay-taxes/01/398646#M14945 <P>An S-corp is a pass-through entity. It does not pay taxes and all its profits/losses are allocated to its shareholders through the forms K-1. Each shareholder is taxed on their allocation of profits reported on the K-1, even if the profits have not yet been distributed.</P><P>On the other hand, when you receive distributions form the S-Corp, these distributions are not taxable.<BR /></P> Tue, 04 Jun 2019 19:51:03 GMT https://ttlc.intuit.com/community/business-taxes/discussion/an-s-corp-is-a-pass-through-entity-it-does-not-pay-taxes/01/398646#M14945 MinhT 2019-06-04T19:51:03Z