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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4502
Experience:  Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
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HOW ARE DIVIDENDS PAID TO AN INDIVIDUAL THAT IS A 100% OWNER

Resolved Question:

HOW ARE DIVIDENDS PAID TO AN INDIVIDUAL THAT IS A 100% OWNER OF AN 1120 CORPORATION
REPORTED ON RETURN? WHERE DO YOU DEDUCT THEM?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

NPVAdvisor :

Hi,

NPVAdvisor :

For a C-Crop, dividends distributed to shareholders have no direct bearing on your tax return, but rather it's just an accounting entry reducing retained earnings and a corresponding reduction in cash.

NPVAdvisor :

Remember that the decision to pay a dividend comes AFTER taxes are paid and done (Management either pays a dividend or leaves the money in Retained earnings)

NPVAdvisor :

On the individual return side, you should issue a 1099-Div and you'll enter that on your personal return

NPVAdvisor :

1099-DIV is issued to an investor if $10 or more of dividend income was paid during the year

NPVAdvisor :

And as long as you've held the stock for more than 60 days, you'll report on Line 9b of your Form 1040 or 1040-A. Be sure to use the Qualified Dividends and Capital Gain Tax Worksheet found in the instructions for Form 1040 or 1040-A to calculate the tax on qualified dividends at the preferred tax rates

NPVAdvisor :

Make sense?

NPVAdvisor :

I still don't see you coming into eh chat here, so I'll move us to the "Questions and Answer" mode ... maybe that will help (We can still continue our dialogue there, just not in Live Chat as we can here) ... Please let me know of you have an questions at all.

NPVAdvisor :

If this HAS helped, I would appreciate a feedback rating of 3 (OK) or better … That's the only way they will pay us here.


HOWEVER, if you need more on this, PLEASE COME BACK here, so you won't be charged for another question.

NPVAdvisor :

Let me know

NPVAdvisor :

Lane

Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 4502
Experience: Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986
Lane and 2 other Tax Specialists are ready to help you
Expert:  Lane replied 1 year ago.


Hi Jamie,

just checking back in here, as I never saw you come into the chat.

Let me know if you have any questions at all.

Since you said 1120 (rather than 1120-S) my assumption is that you're talking about a C-Corp.

If this is a S-Corp we can talk about that too.

Let me know,

Lane
Expert:  Lane replied 1 year ago.

Thanks so much Jamie!

If I can help further, let me know

Lane

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Lane
Lane
JD, MBA, CFP, CRPS
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Juris Doctorate, CFP and MBA, Providing Financial & Tax advice since 1986