S Corp Shareholder Distribution From Contributed Capital Vs Distribution of Profits

In a S Cooperation I am reading that all distributions must be equal to the percentage that the shareholder owns to maintain S Corp status. My question is, can there be a differentiation between corporation paying a distribution based on EOY retained earnings of profit, vs a distribution that shareholder takes takes from his/her basis (or capital contributions)? I realize that a Corporation distribution to shareholder would also be a debt from their basis.

There are a few things that were charged on a company card that I am classifying as "not a company expense" which were personal and therefore placing it under a distribution to the shareholder (which sits under their Capital Contribution account).  Due to the charges being un-even amounts, these charges are disproportionate to shareholder vs other shareholders. Unless there is some explanation that would allow me to have a un-even distribution, I am seeing this as having to cut a check to the other shareholders to make distributions even across the board. They then would have the option of putting the money back in the corporation as a capital contribution if they chose to

Thanks for anyone taking the time to read my question. I appreciate any input.

Answer

1 person found this helpful

This is Shareholder Loan = Other Current Asset:

"and therefore placing it under a distribution to the shareholder"

You Reduce their distribution to Net, making them repay the Loan, before giving them their distribution; or, make them Repay that loan, now. And they need to Stop using the Corporation as if that is their Parents' Wallet.



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