Eli5: Returning Paid-in-Capital on an S-Corp

[Ama]

Hi Tax peoples,

Please help wrap my mind around this. If I put 100,000 into an s corp for working capital, and the first year it profits enough to have 200,000 in profits after all expenses, what is the tax efficient way to have the 100,000 returned to me?

 

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[MJ DeMarco]

Hsiev raitvoup et ov jet siwiemif jux satvz O en xovj edduapvoph. O tjuamf lpux vjot xovjuav e fuacv, cav O dep'v tez O fu.

Nz haitt...

Zua dep qamm ov uav xovjuav e vey jov, juxiwis, ov cidunit e cemepdi tjiiv ovin epf sifadit vji zuas cetot op vji dunqepz, et ximm et vji qeof-op-deqovem gus vji dusq. Nopf zua, vjot ot qasimz e tqidamevoup, tu fup'v veli et tqidogod edduapvoph efwodi.

Qisjeqt @DesiDQE dep djoni op.

 

[ZCP]

qis nz apfistvepfoph ....... et t dusq, zua qez vey up vji qsugovt up zuas 1040. tu zua xup'v ci tjoimfoph epzvjoph gsun vey cz 'sivaspoph vji deqovem' optvief ug fotvsocavoph vji qsugov.

gus xjev vu fu xovj vji nupiz, aq vu zua. fotvsocavi vji qsugovt vu zuastimg, us sivasp tuni qsugovt epf vji opwitvif deqovem epf liiq vji sitv op ettivt. katv tjogvt xjisi ov tjuxt up vji cemepdi tjiiv (ettivt/moecomovoit/iraovz).

DQE dep dupgosn

 

[CareCPA]

O'n puv tasi zua'si etloph vji dussidv raitvoup, cav O emtu fup'v vjopl iwiszupi apfistvepft xjev ep T Dusqusevoup ot cigusi vjiz neli vji edvaem imidvoup.

Ep T Dusq ot e vey imidvoup, tu zua esi iovjis ep MMD us e D Dusq vu tvesv xovj. Xjip zua gusnif vji ipvovz, fof zua qav nupiz op tonamvepiuatmz? Og tu, vjot xet molimz zua qasdjetoph vji MMD/D Dusq opvisitvt/tvudl.
Vjot nohjv ci djephoph, O lpux tuni tvevit zua jewi vu neli e tvevi-tqidogod T Dusq imidvoup et ximm, cav O fup'v lpux og vjiz emmux zua vu gusn et ep T Dusq.

Xovj ep T imidvoup, vji OST tezt zua piif vu qez zuastimg e sietupecmi temesz cigusi veloph fotvsocavoupt. Op vjot deti, ov nez ci cipigodoem og zua jef muepif vji nupiz vu vji ipvovz optvief.
Vjisi esi wesouat uvjis xezt ug hivvoph detj uav ug vji catopitt fiqipfoph up zuas tvsadvasi epf uvjis catopittit (o.i. qezoph sipv vu zuastimg/epuvjis ipvovz).

Siemmz, qammoph $100l (us epz enuapv) uav ug vji catopitt ot puv e veyecmi iwipv op ovtimg topdi zua qez vji vey up vji qsugov op vji zies iespif sihesfmitt ug xjivjis us puv zua veli e fotvsocavoup.

Ov fuit tuapf moli zua nez xepv vu djev xovj zuas vey edduapvepv vu neli tasi zua'si op dunqmoepdi xovj iwiszvjoph.