AAA S Corp

[miatax]

2008 AAA Beginning Balance = ($29,698) s/h undistr taxable income = ($2,574)

2008 Net Income = $36,000 (This amount already takes into account any salaries paid to herself).

2008 Distributions / Advances to Personal Account = $11,000

So what would my 2008 AAA Ending Balance look like?

ATX calculations zero AAA at end so I reduced my paid in capital by the excess. Is this ok? Also, is the negative s/h undist taxable income ($2,574) to carryover as it has rolled over from prior years? My r/e shows this amount on the balance sheet as well.

Let me know. Thank you!

[taxxcpa]

2008 AAA Beginning Balance = ($29,698) s/h undistr taxable income = ($2,574)

2008 Net Income = $36,000 (This amount already takes into account any salaries paid to herself).

2008 Distributions / Advances to Personal Account = $11,000

So what would my 2008 AAA Ending Balance look like?

ATX calculations zero AAA at end so I reduced my paid in capital by the excess. Is this ok? Also, is the negative s/h undist taxable income ($2,574) to carryover as it has rolled over from prior years? My r/e shows this amount on the balance sheet as well.

Let me know. Thank you!

You may be trying to make the AAA equal Retained Earnings. AAA can only be reduced below zero by losses, not shareholder withdrawals which reduce Retained Earnings, but not AAA.

[miatax]

So based on the above information, is it correct for the AAA Ending balance to be zero?

Theoretically thinking... if the client made enough profit this year to get out of a carrying-over hole, then AAA would be positive, but if she took out withdrawals in excess of any positive AAA left, then this would zero out the AAA and the excess would have to come out of APIC. Is this correct?

The other issue, is that ATX automatically calculates the R/E and it happens to be exactly as the amount on Column C of the M-2 - undistributed taxed s/h income which is ($2,574). This doesnt' make sense to me though.. This is a carryover from prior years, but I don't understand how this can be negative...