QuickBooks questions

[BellaWyn]

You better check with your CPA.

Or tax professional (not all CPA's know tax). It's a waste to argue the nuances here because we don't know the whole picture.

In an S Corp, if the current year corporate distributions exceed the corporate profits and also exceed the existing Retained Earnings then Capital gains could come into play. But that usually happens related to the sale of assets. There are lot of moving parts and a multiplicity of things that could influence the numbers. Leave it to the OP's tax person to figure it out!

 

[Kal]

You better check with your CPA. That is not how S Corp works. You only get relief if it is a C Corp where taxes have been paid by the corporation.

Do you think one must know the details of the business before making a final judgement?

 

[VacationForever]

Do you think one must know the details of the business before making a final judgement?

Yes. But telling OP that he only pays 15% capital gains tax on income distributed to shareholders for S Corp is dangerous. He needs to have his CPA provide the advice. We ran a S Corp for 8 years, and we were also shareholders of the corporation and we paid income tax on all passthrough income.

 

[Kal]

My first year as an Sub S Corp was 2002. You might want to look at how a K-1 works.