Question
Where does S Corp shareholder cash contribution to the company get reported?
Sole shareholder of S Corp did not take any distributions but contributed cash to the business. The business incurred a loss in 2020.
How does the cash contribution get reported? To Retained Earnings as a negative distribution or to Additional Paid in Capital?
It seems as though APIC would be the correct treatment. Will the shareholder receive basis for the cash recorded as APIC - reported as stock contribution on the Stock and Loan Basis Info Worksheet? Can APIC be reduced for any future distributions once retained earnings are reduced?
Thank you for your help.
