How do I record an owner distribution from my small business to myself in Quicken 2017

Bearwithhawk

I own a small S corp and am taking an owner distribution. How do I record this distribution in Quicken so that the non-taxable status is maintained?

Tom Young

Are you accounting for the S Corp in the same file as your personal finances?  You really can't do that, at least not very well.

If this distribution will be reported on Schedule K, line 16d "Distributions (attach statement if required) (see instructions)" you'd enter that in Quicken as a reduction of your basis in the S-Corp.

Frankx

Hi @Bearwithhawk,

Distibutions from an S Corp received by an owner are not necessarily taxable and therefore should be recorded as an potential adjustment to the Quicken account that was established to reflect the S Corp ownership.  So the entry in the owner's Quicken file would be:

Debit to: Cash-checking/savings account     xxx.xx
Credit to: ABC S-Corp ownership account                    xxx.xx

The owners K-1 will reflect the income/loss allocations, and other tax related items at year end.

Frankx

Tom Young

Are you accounting for the S Corp in the same file as your personal finances?  You really can't do that, at least not very well.

If this distribution will be reported on Schedule K, line 16d "Distributions (attach statement if required) (see instructions)" you'd enter that in Quicken as a reduction of your basis in the S-Corp.

Frankx

Hi @Bearwithhawk,

Distibutions from an S Corp received by an owner are not necessarily taxable and therefore should be recorded as an potential adjustment to the Quicken account that was established to reflect the S Corp ownership.  So the entry in the owner's Quicken file would be:

Debit to: Cash-checking/savings account     xxx.xx
Credit to: ABC S-Corp ownership account                    xxx.xx

The owners K-1 will reflect the income/loss allocations, and other tax related items at year end.

Frankx

Bearwithhawk

Thank you both Frankx and Tom. In fact the S-Corp books are kept in Quickbooks. Only my personal information is kept in Quicken. The distribution will be reported on Schedule K, line 16d as recorded in Quickbooks. However, I am looking for a simple way to enter this in Quicken without showing it as taxable. Thank you.

Tom Young

"However, I am looking for a simple way to enter this in Quicken without showing it as taxable."

That's what the entry we've both suggested will accomplish.  There will be no entry to a "Category", (income and expense), only an entry to an "Account" (balance sheet).  If you ever reduce your basis to below $0 because of these distributions at that point you'll have taxable capital gains.