Excess basis distribution

Forum|Forum|6 years ago
June 4, 2020
6 replies
48 views

How I can put my Sch L in balance when a shareholder made distributions in excess of the basis? What account I can use for adjust my negative balance?

Thanks

ProSeries Professional

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Best answer by dd4vols

I am assuming you are talking about a Sub-S Corp..... When that happens, I just put the excess as a N/R from the shareholder on the tax return. And make him pay it back in the next tax year. In other words, only make the PTI amount as much as the capital basis can stand...and reflect the overage as a temporary loan...not part of the PTI distributions.

dd4vols

Answer

Intuit Community Champion

I am assuming you are talking about a Sub-S Corp..... When that happens, I just put the excess as a N/R from the shareholder on the tax return. And make him pay it back in the next tax year. In other words, only make the PTI amount as much as the capital basis can stand...and reflect the overage as a temporary loan...not part of the PTI distributions.

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Protax20Author

Level 2

Yes, you are right. I am talking about Sub-S.

What do you mean when you say N/R and PTI. The system let met take the distribution up to the balance on the Sch M-2 and the rest classifies it as distributions in excess of Retained Earnings. I am fine with that but I have the Sch L out of balance and I do not know where to put that diference in order to make it on balance.

I appreciate your answer.

Thanks in advance