Thanks @sjrcpa.

I understand that you don't reduce APIC for distributions. That's why I am saying that the amount paid back to the shareholder for his additional cash paid into the business is not reported as a distribution but is reported as a reduction of APIC. No distribution, just paying back the additional cash the owner had to put into the business.

Are you saying that the APIC can't be paid back and that any money paid back to the shareholder is still reported as a distribution against RE? And even if RE goes negative from distributions that the shareholder still has basis since there is an APIC balance?

Sorry to drag this out. I really appreciate your help.