reporting dividend distribution to S-Shareholders

[k man]

i know the ESOP must report on the 5500 the income distribution it receives as an S-Shareholder. where/how is this reported on the 5500?

[Guest DMZ]

I imagine it may be done differently based on who you ask. We put it as an Other Income item. Since the IRS makes it clear that these are not "dividends" we make sure that the Sch E and the Sch H is filled out such that we do not show any employer stock dividends as being received by the plan.

[BeckyMiller]

This is a matter for discussion. It is true that they are not dividends under the Code, but they typically would be dividends under state law - a distribution made to a shareholder with respect to their ownership interest in the company. As such, I would report them as dividends on the Form 5500 and on any attached financial statements.