Final corporate return - Reconcile pre-liquidation Retained Earnings per bal sheet with amount per Sch M-2

[SLOCalCPA]

I'm filing a final C-Corp tax return for 2025. The form instructions say to present on Schedule L the balance sheet prior to final distribution to shareholder. However, The actual distribution amount that was input and reported on Schedule M-2, to properly zero-out Retained Earnings on Schedule M-2, also zeroes out the Retained Earnings on Schedule L (which I don't want!)

The only way that I could find to present the correct pre-distribution balance sheet on Schedule L is to override ending Retained Earnings on Lacerte Form 38.  Problem is that this then causes Schedule M-2 to show an ending balance on Line 8, which it shouldn't, as it causes Schedule M-2 to be mathematically incorrect, since after subtracting the distribution the ending balance on Schedule M-2, Line 8 should be zero!

Lacerte was unable to help me with this problem at all.  I told them that I can't imaging that it's not a problem that many other practitioners have had over the years! 

Any ideas anyone???

[sjrcpa]

I never knew the instructions said that.

I always show a -0- ending Balance Sheet when there has been a liquidation.

CAGMC

[IRonMaN]

They have instructions for that?  Looks like I’ll be riding in the backseat of the copper car with you when they come to get us.