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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4542
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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On an 1120S corporation. If a shareholder pays for personal

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On an 1120S corporation. If a shareholder pays for personal expenses from the corporation, is this treated as a distribution of property on Sch K-1 line 16 or other information on Sch K-1 Line 17. If it is considered a distribution of property and the amount paid exceeds her stock basis, does she have to report this on Sch D form 1040.

Dear Friend,


This is considered as distribution and is reported in line 16 as you say. This is because You must report on your return (if you are required to file one) any amount required to be included in gross income for it to increase your basis. It is not reported ONLY if it is received against discharge of "indebtedness" towards the corporation.


I am sure this would help...

Warm Regards,



Customer: replied 6 years ago.

Is this considered distribution of property and affect the basis of the shareholder