When distributions from an S Corp exceed Retained earnings and income

joe7230 · ‎09-13-2022

I have an S Corp client whose shareholder distributions exceed his beginning R/E + current year income

by $7,000. The Pro Series software plugs in 0 for retained earnings and makes no mention of the $7000.

I don't do many Corporations and have never encountered this situation before. Not sure how to deal with

this. Any suggestions helpful

dkh · ‎09-13-2022

here is a post with same question

Distributions in excess of retained earnings - Intuit Accountants Community

Terry53029 · ‎09-14-2022

Distributions will reduce his basis, if they exceed basis it will be long/short term capital gain

dd4vols · ‎09-14-2022

or... set the $7,000 us as a note rec from the officer (balance sheet item), and make him pay it back in an ensuing year.

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