How to practically make a distribution in an S corp

[Aiyman Khan]

I am trying to figure out that how will the actual draw for a distribution be made? Would it be mage through a W-2 paycheck as bonuses, or a separate check/bank withdrawal, or paid at the end of year etc... Also I want to know is the distribution subject to income tax and that to the to the business or personal level. Please can someone give me an answer relevant to an example of a profit made through a flipped property, that has a short term capital gain tax event and the s Corp owner wants to draw from that profit, and also would the profit be double taxed as capital gains and income tax? 

[David M.]

@Aiyman Khan

First, technically a dipped property transaction makes your a dealer, not an investor, so in the eyes of the irs and the profit from that the flip is active income, like a wage.

To your question, I believe the ways to withdraw money from a S Corp is by salary or dividend. The former is W-2 income subject to all applicable payroll taxes. The latter is subject to income like any other dividend. This is the main advantage of the S Corp is after you pay yourself a reasonable salary, the rest of the distributions should be taken as a dividend this not subjecting the income to payroll taxes.

The form of payment any legal tender available to the S Corp and the recipient... right? Its a matter of handling/categorizing the transaction properly...

Does this help clear things up?