Did "Your Corp" distribute any money to shareholders, excluding salaries, loans, and profits from Sch K-1? if I took a draw on profit it is excluded in this question?

Forum|Forum|1 year ago
January 31, 2025
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Turbotax is asking: Did "Your Corp" distribute any money or property to shareholders during the tax year, excluding salaries, loans, and profits from Sch K-1? This does not make sense. I am trying to file my 1120-S which will include the K1 that I have not made yet. I take a payroll and often take an owners draw on profit... So both would be excluded from this question?

PatriciaV

Employee

Yes, your salary is an expense to the S-Corp and not a distribution to you as a shareholder. You wouldn't include your salary as a shareholder distribution.

The question is referring to profits on a Schedule K-1 from an investment that is owned by your S-Corp, not profits from your S-Corp itself. If you have distributions from an investment, do not include those amounts as shareholder distributions.

Owners draws may be taxable if they exceed the amount of your capital investment in the S-Corp. The total draws should be included as shareholder distributions.

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