I NEVER do any corporate returns. I only do personal returns with regard to my investment clients but a client has an S-corp and a question. I think I know the answer but I'll ask anyway.
Client has an S-corp that used to be a C-corp and when he transferred, he had $480k in retained earnings. 20 years later, still the same figure. Now he wants to take out half of the money. As I understand it, the S-corp would generate a 1099-Div for the amount and we would lower the Retained earnings accordingly.
Is that right?
Is this then a Property Distribution on the K-1?
This client is a good reason why I decided NEVER do corporate returns!
Client has an S-corp that used to be a C-corp and when he transferred, he had $480k in retained earnings. 20 years later, still the same figure. Now he wants to take out half of the money. As I understand it, the S-corp would generate a 1099-Div for the amount and we would lower the Retained earnings accordingly.
Is that right?
Is this then a Property Distribution on the K-1?
This client is a good reason why I decided NEVER do corporate returns!
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