"at the year end he is left with a profit of 567,000 however he took 465,000 as a distribution. how do i reflect that so that he doesnt have to pay taxes on the full profit."

Why shouldn't he pay taxes on the full profit?

What you are describing is, he is operating a corporation that is a pass-through entity. He reports the corporate income and pays taxes on that, no matter if there is money in the bank, if it was used for new office furniture, for inventory, for taking it to Las Vegas or any other personal use.

Not taking it or taking it is not the taxable event, in and of itself as an event. A distribution is how the shareholder(s) take distributable funds beyond already being paid through payroll for their services to the business (reasonable compensation means payroll).

You didn't state the S Corp bought the property, which, by the way, is the worst entity type to have holding and owning rental real estate.

You stated he took the funds, then bought the property. Always take it in sequence.

1. Distribution

2. personal spending