I'm not any good at helping with the balance sheet stuff, but I'm still unsure about your comment about distributions in excess of Basis. 

You seem to have said the large distributions were from (1) large profit and (2) PPP.  Both the profit and forgiven PPP increase Basis, so distributions from profit or PPP would not be in excess of Basis.

In answer to your question, yes, Basis does not go below zero and the excess distribution would be a capital gain on the 1040.  But as I mentioned above, profit and forgiven PPP increase Basis, so I'm unsure if there really was a distribution in excess of Basis.