Question by Homer:
Our S Corp. sold a property and made a large capital gain (300K) and my question is do we disburse the money among the four stockholders and let them pay their own income tax or do we let the Corp. pay the capital gains tax and then disburse the funds?
Answer By William Bronchick:
An S corporation does not pay capital gains tax on the sale of real property. The shareholders receive an IRS form k-1 through which the gains "pass through." The gain is then reported on the shareholders' personal income tax return.
Disclaimer: The foregoing is not intended to be given as legal, financial or tax advice, but intended for instructional use only. If you require legal, financial or tax advice you should seek the assistance of a qualified professional.
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