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    #1

    Scorp Distribution - Client will be here shortly

    One person Scorp.

    Net income for 2009 = $8000
    Beg RE for 2009 = $92000
    Total = 100,000

    Distribution in 2009 is 125,000. ($25,000 excess)

    Is it o.k.?

    (1) Excess distribution......treat as capital gain on sch D for 2009 and pay tax on personal return
    (2) Create as loan to Shareholder (AR for corporation)
    Client will payback in 2010

    Something else?

    Thanks!
    Last edited by TAX; 05-24-2010, 02:40 PM.
    Tags: None
    #2
    Salary?

    How much was his salary?

    Comment

      #3
      Basis

      Loss allowable up to client's total basis -- not just retained earnings.

      For example, Client may have invested $50,000 in initial stock, then earned $125,000 in Retained Earnings. Entire basis (absent any other facts) would be $175,000, in which case a loss of $150,000 would be allowable.

      Comment

        #4
        Salary

        Originally posted by Lion View Post
        How much was his salary?
        $92000 WAS PAID IN 2009

        Comment

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