|
#3
11-04-2005, 04:09 AM
| |||
| |||
 Re: s corp distribution - quote - > > My s corp has 3 shareholders and I was writing out 2005
I think this is a second class of stock issue on the corp> > profit distribution. each of my shareholders have an equal > > proporttion of the company, however in july, i only wrote > > the check for 2 of the shareholders and on october (this > > month) i wrote another check for half this amount and > > another check for half this amount so now we are even. Will > > i get fined or anything for doing this since i didn't > > distribute my s corp profits at the same time equally to > > everyone? > Not by the IRS for sure. Each shareholder runs a balance > on the books, and each is taxable on share of profits > regardless of whether or not money is withdrawn. side. On the shareholder/individual side, you have no problems. However, if the S corporation didn't have pro-rata distributions, the IRS would look at it as if there were more than one class of stock, and revoke the S election. The corporation would then be taxed as a C corporation and you would have to wait 5 years to re-elect S status. You are only allowed to have one class of stock to qualify as an S corporation. I believe as long as everyone received a pro-rata distribution for the entire year by the last day of the year, everything is ok. << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
|
#2
11-04-2005, 03:31 AM
| |||
| |||
| Re: s corp distribution Harlan Lunsford wrote: - quote - > pharmamedical[at]gmail.com wrote:
Just to follow up a bit here. I believe the previous> > My s corp has 3 shareholders and I was writing out 2005 > > profit distribution. each of my shareholders have an equal > > proporttion of the company, however in july, i only wrote > > the check for 2 of the shareholders and on october (this > > month) i wrote another check for half this amount and > > another check for half this amount so now we are even. Will > > i get fined or anything for doing this since i didn't > > distribute my s corp profits at the same time equally to > > everyone? > Not by the IRS for sure. Each shareholder runs a balance > on the books, and each is taxable on share of profits > regardless of whether or not money is withdrawn. posters are correct that you are not running into any tax problems here. There is more to the world than taxes, however. When you are making a distribution to the shareholders of an S Corporation, you are technically declaring a dividend under your state's business corporation law. You should check the provisions of that law to see what requirements there might be. You may need a resolution by the board of directors, there could be a requirement that all of the distributions be paid at the same time, there is almost certainly a requirement that paying the dividend is only permitted if it does not cause the corporation to become insolvent or unable to meet its creditor obligations. --Chris Ballard << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
|
#1
11-03-2005, 02:31 AM
| |||
| |||
| Re: s corp distribution - quote - > My s corp has 3 shareholders and I was writing out 2005
I believe as long as everyone received a pro-rata> profit distribution. each of my shareholders have an equal > proporttion of the company, however in july, i only wrote > the check for 2 of the shareholders and on october (this > month) i wrote another check for half this amount and > another check for half this amount so now we are even. Will > i get fined or anything for doing this since i didn't > distribute my s corp profits at the same time equally to > everyone? distribution for the entire year by the last day of the year, everything is ok. << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
|
11-03-2005, 02:31 AM
| |||
| |||
| Re: s corp distribution pharmamedical[at]gmail.com wrote: - quote - > My s corp has 3 shareholders and I was writing out 2005
Not by the IRS for sure. Each shareholder runs a balance> profit distribution. each of my shareholders have an equal > proporttion of the company, however in july, i only wrote > the check for 2 of the shareholders and on october (this > month) i wrote another check for half this amount and > another check for half this amount so now we are even. Will > i get fined or anything for doing this since i didn't > distribute my s corp profits at the same time equally to > everyone? on the books, and each is taxable on share of profits regardless of whether or not money is withdrawn. ChEAr$, Harlan Lunsford, EA n LA << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
|
#-1
10-31-2005, 09:30 AM
| |||
| |||
| s corp distribution My s corp has 3 shareholders and I was writing out 2005 profit distribution. each of my shareholders have an equal proporttion of the company, however in july, i only wrote the check for 2 of the shareholders and on october (this month) i wrote another check for half this amount and another check for half this amount so now we are even. Will i get fined or anything for doing this since i didn't distribute my s corp profits at the same time equally to everyone? << ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== > |
| Tags |
| corp, distribution |
Similar Threads | ||||
| Thread | Forum | Replies | Last Post | |
| S-Corp Distribution techiegirl: Customer is going from Sche C to S-Corp. Husband and wife are both shareholders. He has taken distributions of $10,000 and wife has distributions... | Taxes | 7 | 02-03-2005 04:49 PM | |
| S-Corp Distribution agav8r: I own a small s-corporation. I am the only employee and stockholder. I pay myself a reasonable salary monthly. My question is this. On my personal... | Taxes | 2 | 12-11-2004 12:24 AM | |
| S Corp. Distribution Verizon Customer: Hello, I've owned an S corporation for less than a year now. The next quarter is approaching thus I've a question. Apart from the salary I've... | Taxes | 5 | 09-08-2004 06:26 PM | |
| S Corp - Distribution vs. Paycheck Brian Corll: I am a self-employed consultant and I have been an S corp for six years. I have paid myself a bi-weekly paycheck for most of that time, until the... | Taxes | 19 | 09-14-2003 11:10 PM | |
| Thread Tools | |
| Display Modes | |
| |
Linear Mode
