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Balancing the balance sheet for final-year S-Corporation with negative AAA / retained earnings in Lacerte

by Intuit• Updated 3 months ago

The final year of an S-Corporation return has all zero ending balances on the balance sheet except retained earnings—which is negative due to the accumulated adjustments account (AAA).

You can balance the balance sheet in Lacerte using an override field.

Follow these steps to balance the balance sheet:

  1. Go to Screen 29, Balance Sheet.
  2. Scroll down to the Liabilities and Equity section.
  3. Enter a -1 in the Total Retained Earnings [O] field to zero out the Ending column for the Schedule L, line 24.

Per the IRS instructions for the Schedule M-2:  The AAA may have a negative balance at year end. See section 1368(e).

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