Where are non-cash Dividends entered on 1120

Forum|Forum|4 years ago
May 25, 2022
3 replies
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I've read the discussion on where Dividends paid go on the 1120.

1. It doesn't say they are Dividends on the M-2, so how would the IRS know they are Dividends?

2. What if the Dividends distributed actually reduced an excessive amount of retained earnings and no cash was distributed. On what line would that be entered?

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qbteachmt

Level 15

2. If no cash was distributed, then what was given as value in lieu of cash?

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LARRYLIFEAuthor

Level 3

It offset retained earnings and the dividends will be reported on his personal tax return.

qbteachmt

Level 15

"It offset retained earnings"

"It" is what? Of course it also reduces retained earnings, but something has to be distributed, to affect retained earnings. You can't magically change only retained earnings.

Property? Asset? Stock? Money? Perhaps there was an Owed From Shareholder that is offset by a dividend amount? Or, some sort of trade in kind, such as, the Dentist owes the Architecture firm $50,000 and the Architect's kids all need braces?

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