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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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My client has a c corp based in Texas. He owns 100% of the

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My client has a c corp based in Texas. He owns 100% of the stock. He has $65K in "advances to officer" and wants to pay himself a $100K dividend at 12/15/13, 15 days before his fiscal year end.

He will use the proceeds to pay off the advances and keep the difference for himself.
What are the tax implications for his corporation as well as him personally when he receives the dividend?
Hi and welcome to JustAnswer:

There is no deduction to the corporation. It will reduce the c corp's retained earnings. He will receive $35K in cash and the "advance will be $-0-.

He will also receive a Form 1099-DIV for $100K. The dividend will likely be a qualified dividend and will receive preferential tax treatment.
Customer: replied 3 years ago.

would you know off hand what the tax rate on $100K for federal and texas state law would be?

Hi -

There is no individual income tax in Texas. The tax for federal purposes depends on taxpayer's other income and deductions but the rate is 20%. This amount could be higher if the taxpayer is subject to alternative minimum tax.
MequonCPA and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

great thx


Thanks. Glad to be of service.