S Corp Distribution on 1120S

[Hoosier]

S Corp has two 50/50 shareholders and each earned a reasonable salary during the course of the year - each received a W2 from the S-Corp. In December, the shareholders, anticipating a small profit on the 1120S each took a $1,000 distribution from the company. It turns out the 1120 shows a $10,000 profit. The question is where to report the distributions on Schedule K and Schedule K-1. Thanks for any suggestions or advice. I'm using ATX software for anyone with specific software related advice on how to report the distributions.

[DTS]

Hoosier

I use TaxWorks and we have to make a manual input on Sch K, L16d. Also, we have to go into Sch K-1, select overrides, select that line and then we can allocate the distributions, if different, to each partner.

Maybe, do a check to see if your program works the same.

D

[DMICPA]

K-1

I use Preseries and the distribution automatically flows to line 16D on each K-1 probably from a worksheet which appears on page 3 line 16d of the 1120S called property distributions. The amount entered here allocates the distribution based on % ownership.

[Lion]

ATX Community

Also, check with the folks over at

http://www.atxcommunity.com/

the UNofficial ATX community.

[BOB W]

Caution...... In an SCorp, distribution must be equal with each partner according to the % of stock ownership, no allocation is permitted. Unequal distributions means a loss of SCorp status.

[DTS]

Allocation

Very good point, Bob! I had been working for some hours on g/p and health insurance for an LLC and had been doing what I told Hoosier to do, without thinking of that issue of stock. Sorry if I caused any problems.

D