Level 11
09-13-2024
10:23 AM
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The Distributions screen requires you to make entries by shareholder, unlike in the 1065 package.
There's been a recent court ruling that says disproportionate distributions, when not allowed by the operating agreement, doesn't bust your S-election. It's been in the last 3 weeks, and the fact pattern was that the guy who didn't get cash didn't want to pick up his share of the income, and argued that the S-election had been busted and you don't get pass-through income from a C-corp. Tax Court disagreed!