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Frequent Explorer **

End of year income transferred to personal bank account

At the end of 2017 the business profit is shown as income on my K1 that I filed with the IRS on my personal income tax return.  I opened a Business investment bank account and transferred those funds into my personal investment bank account. How would I code this transfer? I did not want to add this as a distrubution since I already paid taxes on these funds on my persoanl return for 2017.

2 Comments
Established Community Backer ***

Re: End of year income transferred to personal bank account

past years income would have posted to retained earnings, then  you do a journal entry to move RE to owner equity.

when you withdraw money from the company it is an equity draw, there is no additional tax consequences on that.

 

You used the word distribution, distributions are only in corporations, have you elected to be taxed as an s-corp?

Frequent Explorer **

Re: End of year income transferred to personal bank account

I am an LLC S Corp.