lmlcpaservices
Level 1

Help on the 1040 Tax Return

S Corp owner has distributions in excess of retained earnings.  The S Corp K-1 shows the total amount of distributions on line 16 D.  When I import the K-1 into the personal tax return, it does not appear to automatically account for or calculate the capital gain tax on the distributions in excess.  Is this a manual entry that I have to make?  If it is manual, what do I need to do on the 1040 return?

Thanks!

0 Cheers
sjrcpa
Level 15

Distributions in excess of basis are taxable. Basis is probably different than retained earings.

Once you figure out the taxable amount, enter it on Sch D/Form 8949. Long-term if S Corp stock held long-term.


Ex-AllStar