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money put into S corp

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    money put into S corp

    Aloha,

    When a sole share holder S-corp puts money into the S-Corps Bank account does that go on Schedule L Additional Paid in Capital or Can it go on line 3 of the schedule M2. My concern is if they later take it out will that trigger a tax other than the normal pass through of the profit on the s-corp.

    Mahalo,

    Bjorn

    #2
    Depending on the amount and purpose on the deposit, I usually treat it as a shareholder loan. This allows repayment at any time without tax consequences. Once it is in Capital or Additional Paid in Capital your choices are limited. I have in the past split a deposit into Capital and Loan to reflect its purpose.
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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