S-Corp Distribution versus Loan


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I am sole shareholder of a 10 year old S-Corp. Income and expenses fluctuate unpredictably during the year but the balance sheet remains fairly constant year end to year end. In years past I took a reasonable salary and the rest of the yearly profit as distributions. In 2009 I took salary plus 120,000 in distributions throughout the year. At year end the S-corp showed only 10,000 in profit . My accountant first classified the 120,000 as distributions in the K-1 but later amended the K-1 to reflect the 120,000 as a loan to shareholder.
1.) Though I saved taxes in 2009 will I eventually have to pay back the 120,000 with after tax dollars? Any way around that?
2.) Can an S-Corp pay more in distributions than it makes in profit during a year, or does that automatically trigger the distributions as salary? The S-corp is financially healthy and there was never a question about that, just the timing issue and trying to match income to expense.
Regards,
J
 
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