Distribution from a C corp

[Duane Anderson]

Tax payer has taken $300,000+ as a distribution out of a C corp which is 100% owned by a partnership of which he owns 100%. the C corp has negative retained earnings at the beginning and end of the year.

Any way to show all or part of this distribution is not taxable to the taxpayer (owner)? Thanks for your consideration and Merry Christmas to all....Duane Anderson

PS...And most of the money was turned into gambling losses which are no longer deductible up to the amount of winnings !

[Anarchrist]

By definition, one person can't own 100% of a partnership.

Money paid out may be non-taxable, e.g. repayment of loan, sale of stock back to company at loss. I don't think we have enough info in this case to determine if any of this is not taxable to the taxpayer.

Gambling losses are still deductible as before.

[Duane Anderson]

It was a cash / property distribution...Not a re payment of loan or sale of stock...Merry Christmas,,,,Duane Anderson

[kathyc2]

If the C's only shareholder is PS, how did the TP take the money out? Since TP is not a shareholder, it is not a dividend.

You have a fiduciary duty to all partners, even if the only partners are husband/wife. Proceed with caution.

[JON]

Lot of good questions that have not been answered - no such thing as a one person partnership. 1120 in the questions has a yes or no answer were there distributions in excess of retained of retained earnings. If yes then follow the instructions. You have a return of capital, but get some of the other questions answered something makes no sense. If RE is negative where did you get the money to distribute - capital or loans?? In both cases it may be easier to structure the transactions better.