and refuse to take on new ones because of the abuses of shareholders.
Jeff-Ohio wrote:and refuse to take on new ones because of the abuses of shareholders.
Seems a little over the top. Maybe you shouldn’t take on partnership clients and individuals either…I mean, there are “abuses” by those groups too…
JR1 wrote:To me, it's about leading and teaching them what to do, and giving them confidence in letting you do the tax savings and keeping them away from trouble. I've just never had a problem over 3 decades.
Nilodop wrote:Harry asked about the entry in the equity section.
Harry Boscoe wrote:Has anyone here taken a shot at *defining* what an "excess distribution" is?
No, I'm referring to the term "excess distribution." The Original Post in this thread stated that the shareholder "took too much money" [out of the corporation, by inference] and thereby created an "excess distribution situation." Somehow, vaguely, I remembered a legal article about "excess distribution" from a corporation's equity and I was quite surprised at being able to find the article easily here online. Some of the legal - as distinguished from tax accounting - aspects of paying too much out of a corporation are .. well .. they're sorta scary.Maybe you are referring to a "distribution in excess of basis"?
The Appendix to the article, which analyzes the changes in this area made by the 1984 REVISED MODEL BUSINESS CORPORATION ACT, is especially interesting as it points out that in that act the lawyers stopped using accounting terms in defining what can be distributed and the consequences for exceeding that. If you don't read the whole article, let me just quote the second sentence in the article. Here's the second sentence: "In common law, there are limits on the amount of assets that can be distributed to owners."The article linked does not mention "shareholder basis" or distributions in excess of same.
Yes, I'm sure that's the case."...doesn't it only come up if a creditor, employee, etc. complains?"
...or maybe both.It had to do with impaired capital or my impaired memory.
Yeah, they *should*......the shareholders, who shpuld pay up to te extent of the "excess distributions".
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