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S Corp taxation

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Jbanana

Junior Member
What is the name of your state (only U.S. law)? WI

I'm wondering if someone can clear up some tax confusion I have. I am a 50% shareholder of a company in Wisconsin. We have been a S Corp for the past 4 years and any disbursements have been split 2 ways. Our bank account always has a good amount of money in it for Federal Requirement Reasons. We are now dissolving the company and im trying to figure out on my personal 1040's if I paid tax on the companies profits from 2008 that were not disbursed. I'm not sure where to look and my accountant is not giving me an answer. The reason I ask and am concerned is the company originally started out with three people. Myself + a husband and wife. We were all equal partners for the first year or so. At that point we incorporated, she almost completely stepped away from the company, and we set the company up with two equal owners. Me and the Husband. I guess I was ignorant but I never really understood exactly how I was taxed personally. Now it's 4 years later, the wife has come back to the company (not with ownership), and we have decided to dissolve due to partnering with a new company. She thinks we should split the balance of our bank account three equal ways. Am I way off base here or did I not pay half the tax on anything paid my way as well as any funds still in that bank account? Yes, every year prior to 2008 the company wrote a check for whatever we owed state and federal however this year I paid it all out of pocket. Corporate tax is paid directly through our company if that matters. I'm desperately trying to clarify what I paid and where I stand in this situation. The wife has always cut the checks so i'm obviously very nervous that im going to get screwed. Any help anyone could provide would be fantastic and I sincerely appreciate you taking the time to reply.
 


What did the K-1's say last year in the percentages column? Was there a board meeting with minutes changing anything there (including an adding or removing of capital or any loans)?
 

CraigFL

Member
You should check your AAA account on Schedule M-2, 1120-S for undistributed income previously taxed. Hopefully, your books will show who got what....
 

Jbanana

Junior Member
Thanks in advance for your prompt reply! I should have a copy of my personal K1 in front of me shorty but nothing was changed at any meetings. Other than year one of the company I've always been an equal 50/50 partner. Get back to you ASAP. Thank you.
 

Jbanana

Junior Member
K1: would the percentages section be on my personal K1? All is see is 85,710 (income) in most spots.
 
The parts mentioned by CraigFL is on the S-corp's return. A copy of that could be helpful.

On your K-1, look to Part II line F. If that's 50%, you should get 50% of the corp on dissolution after payment of liabilities.
 

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