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Scorp

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

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Shannon B1
Expert Alumni

Scorp

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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