Question

How to handle 1120 C Corp cash distribution to owners? Does TurboTax generate a K1?

Forum|Forum|4 years ago
March 26, 2022
1 reply
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Hi, I'm using TurboTax Business to do my 1120 tax forms for a C Corp business. I'm looking to pay out $10,000 cash distributions to the owners of the C Corp. I see in Schedule M-2 there is a place to enter cash distributions that will reduce the C Corp's retained earnings (when I reconcile my balance sheet in TurboTax), but it doesn't generate a K-1 reflecting the $10,000 cash distribution.

Is this the correct way to handle the cash distribution? and will TurboTax automatically generate the K1?

Thanks!

TurboTax Business Windows

A

Anonymous_

Employee

You should consult with a local tax professional.

See https://taxexperts.naea.org/listing/service/corporations

C corporations do not issue K-1s to their shareholders. C corporation distributions to shareholders are considered to be dividends to the extent they come from current or accumulated earnings and profits.

You really do need in-person, professional guidance from a local professional.

C

c13Author

My question is more of a turbo tax question. If the cash distributions are considered to be dividends, Turbo Tax isn't automatically generating it. Any ideas how to have TurboTax generate the 1099-Div properly? Thanks