Discussion:Distribution greater than AAA, so Cap Gain but another Question
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| + | {{ForumReplyPost|UserID=Scot1|Date=24 June 2006|Text=S Corp distributions in excess of the shareholders basis in the S Corp (AAA does not often equal basis) are taxable as a capital gain. Basis includes original capitalization by the shareholder + share of income - share of losses through out the years + any direct shareholder loans made to the S Corp. If there are direct SH loans to the S Corp, treat the distribution as first a repayment of the loan, then as a distribution.}} | ||
Revision as of 12:05, 24 June 2006
Discussion Forum Index --> Tax Questions --> Distribution greater than AAA, so Cap Gain but another Question
Stephanie1 (talk|edits) said: | 24 June 2006 |
| Can anyone help me out here because I am second guessing myself:
S-Corp shareholder took a distribution in excess of AAA. Here are the details: Ordinary Income from S-Corp was $ 3,500 S-Corp is partner in several LLC's. Rental RE Income from LLC k-1's 5,000 Section 1231 gain from LLC's k-1's 14,000 Unrecaptured Section 1250 gain from LLC's k-1's 7,000 S-Corp Non-Deductible Expenses (50% M & E, etc.) 1,000 Distribution taken by shareholder 80,000 So to figure out the amount of the distribution that is taxable as a capital gain, would I take: Ordinary Income from S-Corp was $ 3,500 S-Corp is partner in several LLC's. Rental RE Income from LLC k-1's 5,000 Section 1231 gain from LLC's k-1's 14,000 Unrecaptured Section 1250 gain from LLC's k-1's 7,000 S-Corp Non-Deductible Expenses (50% M & E, etc.) (1,000) Total $28,500 Less Distribution $(80,000) $51,500 Would the $51,500 be the capital gain or do I leave out the Unrecaptured Section 1250 gain of $7,000 from the equation above? I appreciate any help on this! Return has obviously been extended, but need to get it out ASAP | |
| 24 June 2006 | |
| S Corp distributions in excess of the shareholders basis in the S Corp (AAA does not often equal basis) are taxable as a capital gain. Basis includes original capitalization by the shareholder + share of income - share of losses through out the years + any direct shareholder loans made to the S Corp. If there are direct SH loans to the S Corp, treat the distribution as first a repayment of the loan, then as a distribution. | |
