For more information, see the general instructions for Forms 1099, 1098, 5498, and W-2G.Generally, you must furnish Forms 1099-DIV to shareholders by January 31 of the year following the close of the calendar year during which the corporation made the distributions.For more information, see Below-Market Loans under Income and Deductions, earlier. If a corporation cancels a shareholder's debt without repayment by the shareholder, the amount canceled is treated as a distribution to the shareholder.

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A fiscal tax year corporation must file Form 5452 with its income tax return due for the first fiscal year ending after the calendar year in which the nondividend distributions were made. If a corporation's earnings and profits for the year (figured as of the close of the year without reduction for any distributions made during the year) are more than the total amount of distributions made during the year, all distributions made during the year are treated as distributions of current year earnings and profits.

If the total amount of distributions is more than the earnings and profits for the year, see Accumulated earnings and profits, later. You are the only shareholder of a corporation that uses the calendar year as its tax year.

The FMV of any property distributed to a shareholder becomes the shareholder's basis in that property. A corporation will recognize a gain on the distribution of property to a shareholder if the FMV of the property is more than its adjusted basis.

This is generally the same treatment the corporation would receive if the property were sold.

However, see Distributions of Stock or Stock Rights, later.

A corporation generally does not recognize a gain or loss on the distributions covered by the rules in this section.Stock rights (also known as "stock options") are distributions by a corporation of rights to acquire its stock.Distributions of stock dividends and stock rights are generally tax-free to shareholders.However, see Gain from property distributions, later. The amount of a distribution is generally the amount of any money paid to the shareholder plus the fair market value (FMV) of any property transferred to the shareholder.However, this amount is reduced (but not below zero) by the following liabilities.For more information, see chapter 4 in Publication 535. If a corporation pays an employee who is also a shareholder a salary that is unreasonably high considering the services actually performed by the shareholder-employee, the excessive part of the salary may be treated as a distribution to the shareholder-employee.