S-corp Distributions, Cap Gns & Income Reporting

[pacard]

Been pulling my hair out so I decided to seek some insight before I go bald.

Here's the situation:

1. I own 100% of S-Co
2. I had no basis in S-Co at the beginning of '13. (actually, the basis is negative. I've been distributed more than I've put in)
3. S-Co had net income from operations of $30,000.

4. S-Co is a partner in a Partnership. It had no basis at beg of '13
5. S-Co contributed $2000 to the Partnership in '13
6. S-Co received $5145 in Partnership distributions in '13
7. S-Co sold interest in Partnership for $50,000 in '13.

Questions:

a. If the S-corp distributes more money than my basis, is this excess reported on Sch D?

b. Am I correct in stating if the distribution wasn't more than my basis it would be reported on Sch E?

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c. Is the 50k treated as S-corp income to me (K-1, line 16d ---> Sch E --->1040 Line 17) or do I account for this cap gain differently? (I'm hoping it flows thru to Sch D where I can offset the gain with a cap loss carry forward)

or

d. Do I just categorize all amounts as income? (ie. 50k+5145-2000=$53,145) . (no differentiating between net profit from operations vs cap gain)

Thank you sooooo much in advance. I hope all salient points have been properly provided.

pc

[Evan]

I'd seriously consider getting the help of a CPA to answer these questions. These are not the type of questions someone self-preparing a return should handle.

a. If the S-corp distributes more money than my basis, is this excess reported on Sch D?
Yes, this is a capital gain. Short-term or long-term depends on how long you've owned the shares.

b. Am I correct in stating if the distribution wasn't more than my basis it would be reported on Sch E?
Correct. The 1120S K-1 should show the distribution.

c. Is the 50k treated as S-corp income to me (K-1, line 16d ---> Sch E --->1040 Line 17) or do I account for this cap gain differently? (I'm hoping it flows thru to Sch D where I can offset the gain with a cap loss carry forward)
A capital gain does go to the K-1 and then eventually your Schedule E once you figure out how to calculate the gain.

d. Do I just categorize all amounts as income? (ie. 50k+5145-2000=$53,145) . (no differentiating between net profit from operations vs cap gain)
See above.