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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4515
Experience:  35 years tax experience, including four years at a Big 4 firm.
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Can PTI that is reflected on a K1 of the shareholder of an S

Customer Question

Can PTI that is reflected on a K1 of the shareholder of an S Corp be counted as a personal asset of that shareholder while at the same time be used in the valuation of the same S Corp if the distribution was plowed back into the company? Other words, can it be used twice?
Submitted: 11 months ago.
Category: Tax
Expert:  PDtax replied 11 months ago.

Hi from just answer. I'mCustomer I'll assist.

I think it can be counted twice, just not directly.

For example, $10,000 of undistributed s income could be an asset. Additionally, your share of the s corp value is an asset. If the s corp is worth $250,000, a 10% interest might be worth $25,000 before discounts. You in effect can count it twice, just not directly.

I hope that clarifies things. If this answers your questions, please rate my assistance with positive feedback. I'mCustomer

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