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Level 4
February 18, 2022
Question

S Corp owner takes distribution in excess of AAA and OA balances

  • February 18, 2022
  • 2 replies
  • 23 views

Company has negative AAA and $10K of OA.  Shareholder distributions more than 14K.  Program limiting the OA column of M2 to the 10K, correctly.  Excess is throwing off my balance sheet.  Any idea where to enter the 4K excess so balance sheet remains in balance?

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2 replies

dkh
Level 15
February 18, 2022

It should be treated as capital gain.     IRS has the information    https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-stock-and-debt-basis

dkh
Level 15
February 18, 2022

You can also ask Google     how to treat s corp distribution in excess of basis