Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-09-2015, 08:38 PM
Junior Member
 
Join Date: Feb 2015
Posts: 1
Retained Earnings after sale of an S Corp

I was a minority shareholder of an S Corp in California. We have recently sold to a larger corporation. My question is about the retained earnings that I had never received through out the life of the company (5 years). I paid taxes on these earnings every year but would like to know what my options are for using them on the tax year toward the payment I received for my shares of the old company. Can I write them off entirely in the first year or as my tax advisor has been pushing me to do is write them off over 5 years?
Thanks,
J



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-10-2015, 02:40 AM
Moderator
 
Join Date: Oct 2010
Posts: 5,227
Quote:
Originally Posted by Walkingdude View Post
I was a minority shareholder of an S Corp in California. We have recently sold to a larger corporation. My question is about the retained earnings that I had never received through out the life of the company (5 years). I paid taxes on these earnings every year but would like to know what my options are for using them on the tax year toward the payment I received for my shares of the old company. Can I write them off entirely in the first year or as my tax advisor has been pushing me to do is write them off over 5 years?
Thanks,
J
the profits of an S corp are still taxed, including those becoming retained earnings. S-Corps, like regular C-Corps, can decide to retain their net profits as operating capital. However, all profits are considered as-if they were distributed to shareholders. Thus an S-Corp shareholder might be taxed on income they never received. I guess you need to contact your state, CA BOE , for more accurate info un detail on your issue.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Ads
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Retained earnings and reasonable wages for an S-Corp RCMauditor S-Corporation 0 11-21-2014 11:07 AM
Distribution of Retained Earnings during Dissolution of S Corp kfb1111 S-Corporation 1 02-23-2013 09:18 PM
What to do with Retained Earnings? Tex Geoas C-Corporation 3 01-26-2012 01:39 PM
retained earnings rdknight C-Corporation 1 11-21-2009 02:34 PM
Retained Earnings tellme S-Corporation 0 07-15-2009 09:18 AM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning