S Corporation Income, Distributions, and Entity-Level Taxes

Free CPA REG (Taxation & Regulation) lesson in Federal Taxation of Entities. 19 min read, ~2,866 words.

Ordinary business income (line 1) is the residual; separately stated items (capital gain/loss, §1231, charitable, §179, interest, dividends, rental, tax-exempt) keep their character on lines 2-17. Pro rata daily allocation: each shareholder's share = (days held / 365) x ownership % x annual amount; the §1377(a)(2) interim closing election needs...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• V.C2

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