Thanks for your question.
In an S-corp, all items of income
and loss are allocated to each shareholder
according to their stock ownership %. You should receive a Schedule K-1
for each year you were a shareholder. This Schedule K-1 reports any income/loss amounts that were allocated to you. So in 2006, when you had a $143,000 gain, you probably reported that on your Form 1040
Just because you were allocated the income of the S-corp does not mean you actually received it. So if you never received the $143,000 and you want to receive it, you will need to request a distribution from the S-corp from your shareholder capital account
. Distributions are tax free to the extent of your adjusted basis in the stock. If the amount distributed exceeds your basis, then the excess is treated as a gain from the sale of property
So your ex-wife, I presume, could request a distribution and you could each request one for the amount of capital you each presently have in the S-corp.
Hope this helps. Let me know if you have any other questions.
Edited by JK_CPA on 11/2/2009 at 12:56 AM EST