Jump to content
ATX Community

Where does S Corp shareholder cash contribution to the company get reported?


David

Recommended Posts

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? Can APIC be reduced for any future distributions once retained earnings are reduced?

Thank you for your help.

Link to comment
Share on other sites

5 hours ago, Abby Normal said:

APIC and yes it increases basis. Enter it on the basis tab of the K1 in ATX.

You never reduce APIC. Distributions close to Retained Earnings.

What if your distributions have zeroed out Retained Earning? Wouldn't distributions then reduce APIC or do you end in a partial liquidation?

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...