dividends paid to officers of tightly held corp.
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how or where do i enter dividends paid to officers of a tightly held corp. just 3 family members own the corp. thanks. do i just lop the dividends together with their salaries and enter it in officers compensation? thanks, or do use schd. c?
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Schedule M-2 Line 5a. Schedule C is for dividends received.
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I probably have never seen a corp. held together so close to the vest as your tightly held corp. Most of my clients use closely held corps. ;-)
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Now that I have time to seriously answer your question, why would you lump dividends with salary? Why would you use Schedule C for dividends, or for salary? What am I missing here?
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So, i should just enter salaries under comp of officers and where would the dividends they took be entered. thanks.
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Please look at my previous post. This question cannot be answered unless we know whether you're talking about an S Corp or a C Corp. Probably it can't be answered anyway, but at least give us the relevant data.
Inside of a dog, it's too dark to read.
~Groucho Marx
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If it is a C corp I believe I already gave the answer above.
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In case you are not really sure, dividends from a C corp. are distributions of profits(retained earnings), previously taxed to the corp. and taxable again to the shareholders as dividend income.
S corp. distributions are generally distributions of profits(retained earnings, also called AAA), previously taxed to the shareholders and not taxable again to the shareholders.
If you are not sure how to handle this may I suggest taking a class or finding a mentor.
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S Corp or C Corp? Makes a huge difference.
Inside of a dog, it's too dark to read.
~Groucho Marx