Figuring S-Corporation Basis Explaining the Non-Taxable Nature of the S-Corporation Distribution Ok, per the above, distributions made by an S-Corp are not taxable.

The amount of taxes paid by the corporation and by you will most likely differ, as the tax rates for the corporation versus personal are different.

S-Corporation Distributions In many cases, distributions made by an S-Corporation are not taxable to the shareholder.

As long as you have adequate basis in the corporation, the distribution is tax-free.

The same rules apply to the S-Corp as apply to the corporation for taking the distribution paid to S-Corp equity rather than an S-Corp business expense.

By Maire Loughran There are few instances of double taxes while paying taxes in the USA.

Dividends are one exception to the double income tax rule.

The cash paid by corporations in dividends is not a business expense. This results in double taxes because the business net income is not reduced by the 0; so the corporation pays income tax on the 0.

If your arts and crafts business pays you 0 in dividends, there is a reduction to the corporate checking account but no addition to expenses. Secondly, you as the recipient of the dividend also pay taxes on the 0 when you file your 1040 for the year the distribution was made.

Dividends are distributions of corporate earnings and can be paid on both common and preferred stock.

There are two types of dividends: ordinary dividends and qualified dividends.

The most common types of corporate distributions are ordinary dividends, capital gain distributions, and non dividend distributions.