Hi all,
Client is a 3 person closely held S Corp. One brother bought the other 3 out. My questions below regard owner distributions before the buyout.
The bought out shareholders each took $100k worth of distributions prior to the buyout. The surviving shareholder did not. Do S corp shareholders have to take distributions according to their percent ownership? If so can there be a "constructive distribution" for the surviving s/h? By this I mean can I DR: S/H Distributions and CR: Distribution Payable? The surviving s/h took ample distributions after the sale date.
Thank you in advance to anyone who'd chimes in.
Client is a 3 person closely held S Corp. One brother bought the other 3 out. My questions below regard owner distributions before the buyout.
The bought out shareholders each took $100k worth of distributions prior to the buyout. The surviving shareholder did not. Do S corp shareholders have to take distributions according to their percent ownership? If so can there be a "constructive distribution" for the surviving s/h? By this I mean can I DR: S/H Distributions and CR: Distribution Payable? The surviving s/h took ample distributions after the sale date.
Thank you in advance to anyone who'd chimes in.
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