IRS Form 5452 - How to Report Nondividend Distributions for Your Corporation

If you are an owner in a "C" corporation, you know all too well the double taxation issues.

Tax at the entity level, and then the second layer of tax when dividends are distributed to shareholders.

Cash dividend distributions, however, are only subject to tax to the extent they are distributions from earnings and profits (E&P). If you take a dividend distribution in excess of E&P, that is a non-dividend distribution that is NOT taxable.

You need to complete Form 5452 to document the correct amount of nontaxable dividends.

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DISCLAIMER: I am a licensed attorney and certified public accountant (CPA) in the State of Florida. I am not a financial advisor. The information provided in this video is for entertainment purposes only. No such communication is provided in the course of an attorney-client relationship, and no communication is intended to constitute legal advice. You should speak with your own tax and legal professionals to discuss your circumstances before performing any of the tax, legal or accounting strategies demonstrated in this video. Thank you.