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Discussion Forum Index --> Tax Questions --> S-Corp bottom line income
Budrok@Aol.com (talk|edits) said:
| 13 January 2006
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| Bottom line S-Corp. Ordinary Income on the 1120S when passed to the K-1. Would this be the same as Dividents paid to an Officer that's passed to a K-1 then to their personal Sche. B. I guess what I mean is would there still be no SE Tax In either case? Is this correct?
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WesR (talk|edits) said:
| 13 January 2006
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| It is not the "same" as dividends even though you are correct both are not subject to s/e tax. "dividends" are subject to the 15% qualified dividend rate for federal tax purposes and would not be reported on the k-1 but a 1099-div from the s corp to the shhr. dividends the s corp earns and passes through to the shhrs would be on the k-1 also subject to fed 15% rate if qualified. "bottom line" s corp income is subject to your shhr's ordinary income tax rates.
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LJACPA (talk|edits) said:
| 13 January 2006
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| Do you really mean Dividends or are you talking about Distributions? There is a huge difference. If you are talking about Distributions, these are not reported on a 1099 but are reported on K-1. As well, they are not reported on the shareholders' 1040 anywhere, nor are they taxable if not in excess of basis. I'm sorry if I misunderstood your questions.LJACPA 08:14, 13 January 2006 (CST)
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