Knowledge Base

16511: 1120S - Distributions in Excess of Basis

1120S Sub S Corporate

Does Drake automatically calculate the gain that results from a distribution in excess of basis from a s-corp K1? 


A distribution reported in box 16, code D flows to the Adjusted Basis worksheet, line 5. If a distribution exceeds the basis that the taxpayer has in the s-corporation, the difference will be carried to Form 8949, Part II. Box F is checked and the description shows as "Excess Distribution" with the name and EIN of the s-corp listed: 

Review Wks K1S Detail Adj Basis in view mode for details.

Note: Distributions in excess of stock basis are treated as capital gains regardless of whether or not the taxpayer has debt basis.

See the IRS' page S Corporation Stock and Debt Basis for more information about basis and distributions. 

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