i have a 1099misc from an S corporation that is a distribution of royalty payment received. My understanding is that that qualifies as a long term capital gain. Correct?

I have a 1099Misc from an S Corporation in Texas. I am president of the corporation and I received a royalty distribution from the corp.  My understanding is that this qualifies as a long term capital gain.  How do I report this on TurboTax?

Answer

 you say the S Corp received the royalty payment and then made a distribution to you. if so, it should be the one reporting the income on its the tax return and on the K-1 for shareholders.  As to capital gain status can't tell you, but most royalties are not capital gain so please advise as to the nature of the royalty.    The S Corp should not have issued the 1099 MISC because what you got appears to be a distribution of income  - a dividend that is generally not reported to the IRS on a 1099 but only as a distribution on the K-1.        

you probably should seek professional help to make sure of proper reporting both for the corp and for the shareholders.      

Was this answer helpful? Yes No
Default user avatars original
TaxPro+40 , Business Owner
SuperUser

No answers have been posted

More Actions

People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Do you still have a question?

Ask your question to the community. Most questions get a response in about a day.

Post your question to the community
Ttse