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
here is a post with same question
Distributions in excess of retained earnings - Intuit Accountants Community
Distributions will reduce his basis, if they exceed basis it will be long/short term capital gain
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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