michele
Level 7
08-06-2021
01:02 PM
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yes it was . On the balance sheet shows him with -179,000 in retained earnings. but it does subtract it from the M-2 anaylis. The total from the m-2 shows a reduction of $283,000 in non taxable income..I would assume I would have to show as a capital gain on his 1040. So in theory he has a negative retained earnings and still 369,000in nontaxable earnings on m-2 going forward. I don't like when they don't ask before they do this stuff. Sets you up for an audit when you are taking close to a 1,000,000 in distrubtions and not taking the kind of salary to justify this.