Have a tax question? Ask a tax Expert
Hey! I'm Carter, I'm a CPA and can help you out with this.
You can book these as a withdraw/distribution in the equity section of the balance sheet if it is a disregarded entity that flows to the Schedule C.
If its a partnership, you probably want to classify them as guaranteed payments since they were in exchange for compensation.
If its an S Corp, he should have issued himself a W-2 and the amounts would be booked as officer compensation.
Let me know if you need anything else. If not, please leave a rating. Thanks!
Hey! Just wanted to follow up to see if you needed anything else. If not, please leave a rating so I can get credit for helping you out. Thanks!