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For an S Corp, if the shareholder distribution is in excess…

Hi Carter,For an S Corp...
Hi Carter,For an S Corp, if the shareholder distribution is in excess of the shareholder’s stock basis, this is treated as gain from the sale or exchange of the underlying stock; however, can you tell me if the shareholder's ownership percentages are affected by this?
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Answered in 9 hours by:
3/15/2018
Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,269
Experience: Adjunct Professor
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They are not affected by the gain in excess of basis. You can report it on Schedule D as the proceeds = the amount in excess and then $0 of basis.

Carter McBride
Carter McBride, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,269
Experience: Adjunct Professor
Verified
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