SCorp took a large distribution beyond basis. I know I need to report it as a capital gain on 1040. Does this bring the basis on the Scorp basis back to k to 0. We are talking several hundred thousand dollars.

I know how this happened. They had a ppp loan that was very large. Yes they used for payroll. but they had a large profit plus the nontaxable ppp so they just took the money out of the corp. What makes it look worse they did not payoff the loans. so It created this excess.

thx Michele