Discussion:S-Corp Return of Investment
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| Revision as of 12:36, 16 February 2008 RoyDaleOne (Talk | contribs) (See the ordering) ← Previous diff |
Revision as of 12:59, 16 February 2008 TxSrv (Talk | contribs) ($12K ain't much,) Next diff → |
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| {{ForumReplyPost|UserID=RoyDaleOne|Date=16 February 2008|Text=See the ordering rules on S Corp distributions. If he takes more than $12,000 it will reduce his basis in the Company's stock. | {{ForumReplyPost|UserID=RoyDaleOne|Date=16 February 2008|Text=See the ordering rules on S Corp distributions. If he takes more than $12,000 it will reduce his basis in the Company's stock. | ||
| The return of capital is "tax-free".}} | The return of capital is "tax-free".}} | ||
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| + | {{ForumReplyPost|UserID=TxSrv|Date=16 February 2008|Text=$12K ain't much, but is this mere investment or are services as officer provided by this controlling S/H? If so, is a salary being taken?}} | ||
Revision as of 12:59, 16 February 2008
Discussion Forum Index --> Basic Tax Questions --> S-Corp Return of Investment
Discussion Forum Index --> Tax Questions --> S-Corp Return of Investment
| 16 February 2008 | |
| I am doing a return for an S-Corp and the owner wants to know if he can get a return on his investment tax free? He purchased the company for $100,000 and last year, there were $12,000 in profits last year. If he takes a $12,000 distribution, the profit from the corporation is still taxed and the basis would stay the same. Can he get a return on his investment and reduce his basis in the company without paying taxes? Or can this only be done if the corporation has enough other deductions to post a loss or if he sells the company? | |
Michaelstar (talk|edits) said: | 16 February 2008 |
| He needs to report his line 1 K-1 income as taxable.
He can take his $12k and invest in tax free muni's and have a tax free return. If income less decuctions = zero he has a zero income tax free investment! | |
RoyDaleOne (talk|edits) said: | 16 February 2008 |
| See the ordering rules on S Corp distributions. If he takes more than $12,000 it will reduce his basis in the Company's stock.
The return of capital is "tax-free". | |
| 16 February 2008 | |
| $12K ain't much, but is this mere investment or are services as officer provided by this controlling S/H? If so, is a salary being taken? | |
