How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

What do I do if the other shareholders in a S corporation

Customer Question

What do I do if the other shareholders in a S corporation are giving themselves distributions without the consent of all shareholders?
Submitted: 10 months ago.
Category: Tax
Expert:  Lev replied 10 months ago.

Unfortunately - there is nothing you may do tax wise...

That would be a civil matter between shareholders.

Expert:  Lev replied 10 months ago.

As you might know if S-corporation realizes taxable income - that income is passed to all shareholders according with their ownership percentage - REGARDLESS if income is distributed or not.

So other shareholders potentially might be liable for taxes on that distribution made without consent.

The best way out - to negotiate between all shareholders ,

but if that will not provide any positive results - the only way would be to sue that shareholder for damages and violation of the shareholder agreement.

.

.
I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.

Related Tax Questions