I have a company with my father which does very well. I own 1% of the S-Corporation and he owns 99%. We each receive a K-1 showing our share of the profits, and those K-1's are included on our personal returns.
We each draw a salary. In addition to the salaries, we do periodic draws. Last year I took out a significant chunk.
Say in 2018 the company makes 100K after all expenses. He gets a K-1 for 99K, I get one for 1K. We each pay the tax on those sums and the retained earnings can be withdrawn tax-free. That is fine for him, but if I do it, then he has paid the tax on the money that I am taking out!
What I want to do is to take a draw, say 10K, and have that count as an expense to the company BEFORE the K-1's are calculated. So, company makes 100k - 10k, dad gets a K-1 for 89,100, I get one for $900, and then I have this other 10K that I need to pay some kind of tax on.
And how do I take money out of an S-Corp, where I am 1% shareholder, in amounts greatly in excess of that listed on my K-1?
If anyone read all of that I am grateful.