I have a S-corporation where I am the only shareholder. I started the year with a basis of zero and I pay my self a salary. In 2013, After my salary and all other normal business expenses, I have an extra amount of money that the corporation made of $25,000 that was paid out during the year to me via check with the note “distribution” on the check. What is the correct way to record this $25,000 on the 1120S, on the K-1, and where will it flow to on my personal 1040. Does it get recorded as profit on the 1120S and K-1 with a note on line 16D on the K-1 that says distribution then flows into the 1040 on the schedule E, then the distribution note on the line 16 D K-1 does not get recorded anywhere on the 1040 since the profit that was made was distributed back to the owner (however the profit increased by basis and the distribution decreased my basis so the basis would end up at zero again). Or is there a different way I need to handle this type scenario. Thanks for your help.